Morningstar - East Japan Railway Company (9020) JREs Business Transformation Takes Shape but OPEX Pressure Lingers; FVE Raised to JPY 9,500

Report

Morningstar

Lorraine Tan

EUR 100.00 For Business Accounts Only

JRE's Business Transformation Takes Shape but OPEX Pressure Lingers; FVE Raised to JPY 9,500

We are raising our fair value estimate for East Japan Railway, or JRE, to JPY 9500 from JPY 9200, reflecting stronger growth in JREâ€™s Suica and IT business in the medium term and after rolling our cash flow model. JREâ€™s fiscal year ending March 2019 revenue and operating income were in line with our forecasts, with steady ridership volume and stronger growth in the nontransportation segments. The firmâ€™s migration toward real estate, retail, and Suica services in the medium to long term is trendi...

03/05/2019 13 EN

Underlying

East Japan Railway Company

East Japan Railway is mainly engaged in the transportation business. Co. operates railway routes covering mainly in the Kanto area and the Tohoku area totaling of 7,457.3 km of railway with 1,665 stations, 11,506 standard rolling stocks and 1,370 bullet Train rolling stocks as of Mar 31 2017. Co. establishes commercial space in the railway stations and operates restaurants, retail stores, cafes, convenience stores and shopping centers; and leases office buildings located in the railway stations and surrounding areas. Co. is also engaged in hotel business, advertising agency, travel operations, wholesale, truck delivery, information processing, cleaning, as well as credit card business.

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JP3783600004 Japan

Provider

Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

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Analysts

Lorraine Tan

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JRE's Business Transformation Takes Shape but OPEX Pressure Lingers; FVE Raised to JPY 9,500

PSA Market Strategy: Japan Perspective for 2023

PSA Market Strategy: The Japan Perspective 2022

With a more favourable environment, EAST JAPAN RAILWAY improves to Positive

Business as Usual for No-Moat Lonza; Specialty Ingredients Carve-Out on Track for 2020

Sasol Provides Full-Year Production Update

Astra Posts Solid 2Q, Driven by Strong Cancer Drug Sales and Moving Away From One-Time Divestments

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