JR Central: Rebound in Passenger Demand Delivers Strong Earnings Recovery

Central Japan Railway Company, or JR Central, upgraded EBIT guidance for the year ending Mar. 31, 2024, by 7% to JPY 506 billion following a robust December quarter. The upgrade stems from a faster-than-expected recovery in domestic and inbound tourist passenger demand following the pandemic. We upgrade our near-term forecasts in line with guidance while leaving longer-term expectations largely unchanged. We maintain our JPY 3,400 per share fair value estimate and consider the stock fairly valued at current prices.