In a report released today, Chikai Tanaka from Goldman Sachs upgraded TIS Inc. (3626 – Research Report) to a Buy, with a price target of Yen4,410.00.
Chikai Tanaka has given his Buy rating due to a combination of factors related to TIS Inc.’s financial outlook and market positioning. The company’s earnings are anticipated to enter a recovery phase, driven by an improved order environment in software development, particularly within industrial and regional IT sectors. This positive shift is expected as the adverse effects from previous declines in large financial projects begin to subside.
Furthermore, Tanaka has adjusted the discount applied to the sector-average price-to-earnings (P/E) ratio, reducing it from 15% to 10%, and subsequently increasing the target P/E to 20x. This adjustment reflects a more favorable valuation outlook. Consequently, the 12-month target price for TIS Inc. has been raised from ¥3,820 to ¥4,410, representing a potential upside of 15%. Despite the relatively high occurrence of unprofitable projects and a modest medium-term profit growth outlook, these factors collectively justify an upgrade from a Neutral to a Buy rating.
According to TipRanks, Tanaka is a 2-star analyst with an average return of 1.0% and a 41.18% success rate. Tanaka covers the Technology sector, focusing on stocks such as NS Solutions, OBIC Business Consultants Co, and Otsuka.