Daiwa (JP:8601)
:8601
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Daiwa
(8601)
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Rating:66Neutral
Price Target:
¥1,760.00
▲(19.48% Upside)
Action:Downgraded
Date:04/28/26
The score is driven primarily by improving earnings momentum but constrained by high leverage and uneven cash-flow quality. Valuation is supportive (low P/E and solid yield), while technical indicators are neutral-to-soft and the earnings call was constructive overall but highlighted acquisition and segment-profit volatility risks.
Positive Factors
Base profit outperformance
Outperforming the midterm base-profit target (¥182.7bn, +32.9% YoY) demonstrates durable operational leverage and disciplined strategy execution. Sustained base-profit growth bolsters ROE and supports the dividend floor and reinvestment capacity, enhancing earnings quality over the next 2–6 months.
Negative Factors
High leverage
Elevated and rising leverage (debt ¥5.78T; debt/equity ~3.3x–4.0x) constrains financial flexibility and raises sensitivity to funding stress. High leverage limits capital return and strategic optionality, increasing reliance on favorable market access or successful deleveraging over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Base profit outperformance
Outperforming the midterm base-profit target (¥182.7bn, +32.9% YoY) demonstrates durable operational leverage and disciplined strategy execution. Sustained base-profit growth bolsters ROE and supports the dividend floor and reinvestment capacity, enhancing earnings quality over the next 2–6 months.
Read all positive factors
Daiwa (8601) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥2.21T
Dividend Yield4.13%
Average Volume (3M)5.10M
Price to Earnings (P/E)12.8
Beta (1Y)1.47
Revenue Growth7.41%
EPS Growth15.07%
CountryJP
Employees14,600
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 Target
¥1,561.00Price Target Upside5.97% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering1
EPS Forecast (FY)123.66
Revenue Forecast (FY)¥746.06B
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
Daiwa primarily makes money by earning fees and spreads from its securities and investment banking activities across retail (individual and affluent clients) and wholesale (institutional and corporate clients). Key revenue streams typically includ...
Daiwa Earnings Call Summary
Earnings Call Date:Apr 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 05, 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
1473.00
Price Trends
1517.76
Positive
1520.05
Positive
1384.07
Positive
Market Momentum
29.75
Negative
67.91
Neutral
87.21
Negative
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 1473 is below the 20-day moving average (MA) of 1536.70, below the 50-day MA of 1517.76, and above the 200-day MA of 1384.07, indicating a bullish trend. The MACD of 29.75 indicates Negative momentum. The RSI at 67.91 is Neutral, neither overbought nor oversold. The STOCH value of 87.21 is Negative, 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 | ¥95.72B | 9.13 | ― | 5.75% | 30.59% | 55.29% | |
70 Outperform | ¥211.94B | 8.99 | ― | 4.01% | 21.03% | 85.36% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | ¥2.21T | 12.83 | 9.37% | 4.13% | 7.41% | 15.07% | |
65 Neutral | ¥248.83B | 16.31 | 14.00% | 5.13% | 34.33% | 47.34% | |
59 Neutral | ¥4.13T | 0.29 | 10.23% | 3.93% | 0.46% | 6.87% | |
56 Neutral | ¥158.80B | 14.54 | 7.26% | 4.16% | 46.50% | ― |
* Financial Sector Average
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Daiwa Corporate Events
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...
Daiwa Securities to Acquire ORIX Bank in ¥370 Billion Deal
Apr 27, 2026
Daiwa Securities Group will acquire all issued shares of ORIX Bank Corporation for approximately ¥370 billion, making it a wholly owned subsidiary financed entirely from its own funds. The deal is positioned as a strategic use of the group...
Daiwa to Acquire ORIX Bank to Bolster Lending and Trust Capabilities
Apr 27, 2026
Daiwa Securities Group and wholly owned unit Daiwa Next Bank will acquire all shares of ORIX Bank Corporation from ORIX Corporation, making ORIX Bank a wholly owned subsidiary of Daiwa Next Bank. The deal is positioned as a strategic response to J...
Daiwa Securities Outlines FY2025 Q4 Results and Segment Performance Framework
Apr 27, 2026
Daiwa Securities Group Inc. released materials outlining its financial results for the fourth quarter of FY2025, together with an overview of its balance sheet, profit and loss, SGA expenses, overseas operations, and segment performance across wea...
Daiwa Securities Lifts Earnings and Dividend but Withholds Outlook Amid Market Uncertainty
Apr 27, 2026
Daiwa Securities Group reported higher operating revenue and profit for the fiscal year ended March 31, 2026, with consolidated net operating revenue rising 11.5% and profit attributable to owners of the parent up 13.5%, lifting return on equity t...
Daiwa Securities Group Lifts FY2025 Annual Dividend to ¥64 Per Share
Apr 27, 2026
Daiwa Securities Group Inc. has approved a FY2025 year-end dividend of ¥35 per share, with a record date of March 31, 2026 and an effective payment date of June 1, 2026. This year-end payout, funded from retained earnings, results in a total ...
Daiwa Securities Discloses Liquidity and Funding Ratios for Q3 FY2025
Apr 27, 2026
Daiwa Securities Group Inc. has reported on the soundness of its liquidity management as of the third quarter of fiscal 2025, in line with Japan’s Financial Instruments and Exchange Act. The disclosure covers the group’s consolidated L...
Daiwa Securities Reports Capital Adequacy and Leverage Ratios for 2025
Apr 27, 2026
Daiwa Securities Group Inc. has reported its consolidated capital adequacy ratio and consolidated leverage ratio, outlining the situation of management soundness as of December 31, 2025. The disclosure, made under the Financial Instruments and Exc...
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.