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On Thursday, JPMorgan analysts upgraded Seibu Holdings Inc (9024:JP) stock from an Underweight to a Neutral rating. This decision is accompanied by an increase in the price target to ¥3,800 from the previous ¥2,800.
The analysts attribute this upgrade to a revised valuation that incorporates unrealized gains in real estate. The potential inclusion of Seibu Holdings in the MSCI Japan Index is also a factor in the decision. The analysts noted that the relative downside for the stock has narrowed, prompting the change in rating.
Seibu Holdings has been involved in monetizing assets and optimizing capital. However, the sale of Tokyo Garden Terrace Kioicho is seen as the conclusion of significant asset sales and share buybacks for the time being. This change in strategy has led to increased earnings volatility due to real estate sales.
The analysts highlighted the importance of Seibu Holdings’ ability to maximize its net asset value (NAV) through asset recycling over the long term. They suggested this approach is more critical than focusing on earnings in any specific year.
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