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Investing.com - CLSA downgraded Rinnai Corporation (5947:JP) (OTC:RINIF) from Outperform to Hold on Friday, while lowering its price target to JPY4,100.00 from JPY4,300.00.
The downgrade reflects concerns about weak sales in China and temporary productivity issues in Japan that are expected to impact Rinnai’s earnings for the fiscal year ending March 2026.
CLSA believes Rinnai’s interim operating profit will likely fall short of the company’s guidance, though the research firm notes management could increase its share buyback budget from ¥10 billion in fiscal 2026 to ¥20 billion in fiscal 2027 to improve return on equity.
The firm expects Rinnai to target a 10% ROE in its upcoming medium-term plan for fiscal years 2027-2031.
With the new price target representing only 3% upside potential, CLSA determined a Hold rating was more appropriate for the water heater and home appliance manufacturer.
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