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Investing.com - Morgan Stanley has downgraded Sumitomo Forestry Co (TYO:1911) from Equalweight to Underweight and reduced its price target to JPY1,400.00 from JPY1,500.00.
The downgrade follows Sumitomo Forestry’s lowered guidance for fiscal year ending December 2025 and a reduction in its dividend per share outlook to the JPY50 floor outlined in its mid-term plan.
Morgan Stanley cited ongoing challenges in the U.S. housing market as a key factor in its decision, noting that inventory levels for both new and existing homes continue to increase.
The investment bank expressed particular concern that prices for new homes are now falling below those for existing ones, which could trigger further price reductions in the existing home market.
These market conditions could lead to "greater deterioration in supply/demand, and a slow recovery" for Sumitomo Forestry’s U.S. operations as well as other Japanese homebuilders with American exposure, according to the Morgan Stanley research note.
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