Raymond James initiates QXO stock with Outperform rating on acquisition strategy
Investing.com - JPMorgan has upgraded Nomura Research Institute Ltd. (4307:JP) (OTC:NRILY), a $21.5 billion market cap IT services firm, from Neutral to Overweight and raised its price target to JPY6,700.00 from JPY5,600.00. The stock has delivered strong performance this year, with a 27.7% gain year-to-date.
The upgrade follows the company’s first-quarter results, with JPMorgan forecasting a three-year compound annual growth rate through fiscal year 2027 of 7% for sales, 12% for operating profit, and 13% for earnings per share. According to InvestingPro data, the company maintains a strong financial health score of GOOD, supported by solid liquidity with a current ratio of 1.84.
JPMorgan expects margin improvements from production innovation to gain traction gradually and anticipates AI initiatives will continue to reduce outsourcing expenses for the firm.
The investment bank projects Nomura Research Institute’s fiscal year 2025 operating profit will reach JPY156.8 billion, exceeding the Bloomberg consensus estimate of JPY152.6 billion, and sees potential for the company to raise its 20%-plus return on equity target in its next medium-term plan.
JPMorgan also highlighted strong conditions in consulting, financial IT, and security services, while noting the company’s defensive position against trade risks, though it acknowledged that profit improvements in overseas business are likely to be limited.
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