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Daiwa
(8601)
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Rating:70Outperform
Price Target:
¥1,992.00
▲(6.44% Upside)
Action:Upgraded
Date:08/06/26
The score is driven primarily by improving earnings momentum but tempered by high leverage and uneven cash-flow history. Technicals are supportive with an uptrend and healthy (not overbought) momentum. Valuation is reasonable with a solid dividend yield, while the earnings call adds upside from strong base-profit execution and shareholder returns, balanced by investment banking weakness and acquisition-related capital/execution risk.
Positive Factors
Wealth Management scale
Record AUM and persistent net inflows expand asset-based, fee-bearing revenue that is less cyclical than trading income. Higher asset fees improve fixed-cost coverage and margin stability, creating a more predictable, recurring earnings base and long-term cash flow resilience for the group.
Negative Factors
Elevated leverage and capital strain
High and rising leverage constrains financial flexibility and increases sensitivity to funding costs. The ORIX Bank acquisition, funded internally, reduces capital ratios and may require AT1 or other capital actions; this raises long-term execution and rating risk and limits cushion for shocks.
Read all positive and negative factors
Positive Factors
Negative Factors
Wealth Management scale
Record AUM and persistent net inflows expand asset-based, fee-bearing revenue that is less cyclical than trading income. Higher asset fees improve fixed-cost coverage and margin stability, creating a more predictable, recurring earnings base and long-term cash flow resilience for the group.
Read all positive factors
Daiwa (8601) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥2.45T
Dividend Yield3.54%
Average Volume (3M)5.10M
Price to Earnings (P/E)14.3
Beta (1Y)1.42
Revenue Growth7.41%
EPS Growth15.07%
CountryJP
Employees14,984
SectorFinancial
Sector Strength70
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)126.03
Shares Outstanding1,569,378,800
10 Day Avg. Volume5,656,200
30 Day Avg. Volume5,101,593
Financial Highlights & Ratios
PEG Ratio0.77
Price to Book (P/B)1.15
Price to Sales (P/S)1.37
P/FCF Ratio5.28
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)138.76
Revenue Forecast (FY)¥804.65B
Daiwa Business Overview & Revenue Model
Company Description
Daiwa Securities Group Inc. functions as a prominent securities broker-dealer with operations spanning Japan and international markets. The company structures its diverse financial activities into four primary segments: Retail, Wholesale, Asset Ma...
How the Company Makes Money
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Daiwa Earnings Call Summary
Earnings Call Date:Apr 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call highlighted multiple material achievements: strong base profit growth (+32.9% YoY), record dividend and shareholder returns, record levels and inflows in Wealth Management (wrap AUM, new contracts, asset-based revenues), robust Global Markets performance (equities and FICC), Daiwa Next Bank NII/profit expansion and record Asset Management AUM. Key strategic upside from the ORIX Bank acquisition was presented with quantified synergy scenarios (potential JPY 35 billion NII uplift), though the deal introduces capital ratio pressure, potential goodwill amortization, and execution risk. Notable negatives include a sharp decline in Global Investment Banking ordinary income (‑60.5%), losses in Alternative Asset Management, declines in real estate segment results, higher SG&A, and overseas profit weakness in the Americas. On balance, the positive operational momentum, record base profit and successful execution against the midterm plan significantly outweigh the setbacks, while the acquisition risk and one-off impairments are manageable if integration and synergy assumptions hold.Positive Updates
Quarterly Consolidated Results: Stable Revenue and Profit Growth
Net operating revenues were JPY 197.8 billion (+1.7% vs Q3 FY2025), profit attributable to owners was JPY 49.8 billion (+7.3% vs Q3), while ordinary income was JPY 67.0 billion (‑3.6% vs Q3). The firm maintained a high consolidated profit level despite a volatile market.
Negative Updates
Ordinary Income Slight Quarter-on-Quarter Decline
Consolidated ordinary income was JPY 67.0 billion, down 3.6% quarter-on-quarter, indicating some near-term profit volatility despite strong underlying base profit growth.
Read all updates
Q4-2025 Updates
Positive
Negative
Quarterly Consolidated Results: Stable Revenue and Profit Growth
Net operating revenues were JPY 197.8 billion (+1.7% vs Q3 FY2025), profit attributable to owners was JPY 49.8 billion (+7.3% vs Q3), while ordinary income was JPY 67.0 billion (‑3.6% vs Q3). The firm maintained a high consolidated profit level despite a volatile market.
Read all positive updates
Company Guidance
The call reiterated strong near‑term performance and clear strategic guidance: FY2025 base profit rose to ¥182.7bn (+32.9% YoY), comfortably above the ¥150bn medium‑term target in year two, with Q4 net operating revenues of ¥197.8bn (+1.7%), Q4 ordinary income ¥67.0bn (‑3.6%), Q4 profit attributable ¥49.8bn (+7.3%) and an annualized ROE of 11.5%; dividends were maintained at a record annual ¥64 per share (interim ¥29 + year‑end ¥35) with a payout ratio of 50.8% and a stated policy of ≥50% (floor ¥40). Wealth Management momentum: net operating revenues ¥81.0bn (+5.2%), ordinary income ¥33.1bn (+12.1%), wrap AUM ¥6.4046tn, new contracts ¥386.2bn, net inflows ¥276.2bn, wrap‑related revenues ¥18.0bn, asset‑based revenues ¥33.4bn, fixed‑cost coverage from asset‑based revenue 120% (total cost coverage 76.5%), cumulative balance‑based revenues ¥123.2bn and group net inflows ¥1.6342tn. Bank/transaction guidance for the planned ORIX Bank acquisition: headline consideration ¥370bn, pro‑forma bank total assets ~¥9tn with ~¥400bn equity, acquisition funded from group cash (¥>1.5tn drawable BOJ balance), target ¥2tn of incremental deposits over 5 years, planned ¥3.5tn lending (real‑estate and securities‑backed) and a modeled 1% margin uplift implying ~¥35bn potential NII improvement; ORIX Bank standalone averages ~¥30bn ordinary income / ~¥20bn net income (5‑yr), consolidation expected to reduce the consolidated total capital adequacy ratio by ~5 percentage points but remain >14% fully loaded, with possible AT1 issuance (no equity financing) and continued flexibility on buybacks subject to capital and ratings.Daiwa Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
60
Neutral
Cash Flow
52
Neutral
| Breakdown | Mar 2026 | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.48T | 1.37T | 1.28T | 871.23B | 623.33B |
| Gross Profit | 790.00B | 679.36B | 663.52B | 511.19B | 486.30B |
| EBITDA | 313.93B | 267.84B | 229.38B | 144.62B | 189.69B |
| Net Income | 175.28B | 154.37B | 121.56B | 63.88B | 94.89B |
Balance Sheet | |||||
| Total Assets | 38.08T | 36.02T | 32.03T | 26.41T | 27.53T |
| Cash, Cash Equivalents and Short-Term Investments | 18.08T | 20.72T | 4.96T | 3.87T | 4.59T |
| Total Debt | 5.78T | 5.39T | 5.17T | 5.05T | 5.52T |
| Total Liabilities | 36.03T | 34.10T | 30.24T | 24.74T | 25.89T |
| Stockholders Equity | 1.77T | 1.65T | 1.53T | 1.42T | 1.38T |
Cash Flow | |||||
| Free Cash Flow | 384.77B | 0.00 | 640.63B | -264.99B | -439.05B |
| Operating Cash Flow | 453.36B | 0.00 | 705.12B | -183.75B | -353.47B |
| Investing Cash Flow | -595.90B | -353.44B | -223.99B | 7.46B | -218.53B |
| Financing Cash Flow | 199.42B | 199.02B | -2.85B | -565.88B | 377.09B |
Daiwa Technical Analysis
Positive
1871.50
Price Trends
1676.79
Positive
1587.45
Positive
1481.94
Positive
Market Momentum
36.04
Positive
55.62
Neutral
38.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8601, the sentiment is Positive. The current price of 1871.5 is above the 20-day moving average (MA) of 1817.83, above the 50-day MA of 1676.79, and above the 200-day MA of 1481.94, indicating a neutral trend. The MACD of 36.04 indicates Positive momentum. The RSI at 55.62 is Neutral, neither overbought nor oversold. The STOCH value of 38.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8601.
Daiwa Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | ¥98.54B | 8.45 | ― | 5.75% | 38.76% | 64.54% | |
70 Outperform | ¥2.45T | 14.34 | 10.35% | 3.49% | 7.41% | 15.07% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | ¥246.41B | 8.07 | ― | 4.01% | 38.46% | 176.98% | |
66 Neutral | ¥269.65B | 14.83 | 19.66% | 5.13% | 43.71% | 73.74% | |
64 Neutral | ¥4.37T | 0.31 | 404.11% | 3.19% | 6.38% | 8.32% | |
56 Neutral | ¥176.59B | 16.24 | 8.98% | 4.18% | 17.45% | ― |
* Financial Sector Average
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Daiwa Corporate Events
Daiwa Securities’ Q1 Profit Surges as Auditors Clear Results Without Revisions
Aug 6, 2026
Daiwa Securities Group Inc. reported consolidated operating revenue of ¥434.4 billion and net operating revenue of ¥220.4 billion for the three months ended June 30, 2026, marking strong year-on-year growth in both top line and profitabi...
Daiwa Securities Outlines 1Q FY2026 Performance and Earnings Drivers
Aug 3, 2026
Daiwa Securities Group reported its financial results for the first quarter of FY2026, providing an overview of performance, balance sheet and profit-and-loss trends, as well as segment-level data across wealth management, asset management, and gl...
Daiwa Securities Posts Strong First-Quarter Rebound and Reaffirms Dividend Floor
Aug 3, 2026
Daiwa Securities Group reported a strong rebound in the three months to June 30, 2026, with operating revenue rising 33.1% year on year to ¥434.4 billion and net operating revenue up 42.0%. Operating income more than doubled, ordinary income ...
Daiwa Securities Completes Full Acquisition of ORIX Bank
Aug 3, 2026
Daiwa Securities Group, through its wholly owned unit Daiwa Next Bank, has completed the acquisition of all issued shares of ORIX Bank Corporation, making the lender a wholly owned subsidiary. The transaction transfers full control of ORIX Bank to...
Daiwa Securities Launches New Series of Stock Option-Based Share Acquisition Rights
Aug 3, 2026
Daiwa Securities Group Inc. has approved the issuance of Series 23 share acquisition rights to be used as stock options, creating 39,242 rights that entitle holders to acquire up to 3,924,200 common shares. The options will be granted without cons...
Daiwa Securities Group Reports Liquidity and Funding Soundness for Q4 FY2025
Jul 31, 2026
Daiwa Securities Group Inc. has reported on its consolidated Liquidity Coverage Ratio and Net Stable Funding Ratio for the fourth quarter of fiscal 2025. The disclosure is made under Japan’s Financial Instruments and Exchange Act and reflect...
Daiwa Securities Details Capital Adequacy and Leverage Ratios for FY2025
Jul 31, 2026
Daiwa Securities Group Inc. has released a detailed report on its consolidated capital adequacy and leverage ratios as of March 31, 2026. The disclosure is issued under Japan’s Financial Instruments and Exchange Act and is intended to demons...
Daiwa Securities Completes Treasury Share Disposal to Employee Share Plan
Jul 22, 2026
Daiwa Securities Group Inc. has completed payment procedures for the disposal of treasury shares to its Daiwa Employee Shareholding Association, as previously resolved by its Executive Management Committee. The move reinforces the company’s ...
Daiwa Securities Completes ¥1.75 Billion Restricted Stock Allocation to Group Executives
Jul 14, 2026
Daiwa Securities Group has completed the disposal of treasury shares under two restricted stock compensation plans, issuing a total of 1,154,900 common shares to directors, executive officers and equivalent personnel at the parent company and its ...
Daiwa Shareholders Approve Full Slate of Directors at 89th General Meeting
Jun 22, 2026
Daiwa Securities Group reported the results of voting at its 89th Ordinary General Meeting of Shareholders held on June 19, 2026, where shareholders voted on the election of fourteen directors. All nominees, including President and CEO Akihiko Ogi...
Daiwa Securities to Dispose of Treasury Shares for New Employee Shareholding Incentive Plan
Jun 19, 2026
Daiwa Securities Group has approved the disposal of up to 891,034 treasury shares via a third-party allotment to its Daiwa Employee Shareholding Association, tied to a newly introduced special incentive plan. Priced at ¥1,517 per share for a ...
Daiwa Securities to Use Treasury Shares for Expanded Restricted Stock Compensation
Jun 19, 2026
Daiwa Securities Group Inc. has approved the disposal of 1,154,900 treasury shares as restricted stock compensation for directors, corporate executive officers, and executives at the parent company and its subsidiaries under two stock compensation...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.