JR East Earnings: Strong Recovery as Passenger Numbers Improve

Narrow-moat-rated JR East earnings improved strongly in the year ending March 31, 2024, as passenger volumes recovered from the pandemic, aided by solid inbound tourism. Revenue increased 14% to JPY 2,730 billion, and operating income more than doubled to JPY 345 billion. The result modestly beat guidance and our expectations, but management largely maintained long-term earnings targets. We increase our fair value estimate by 4% to JPY 2,600 per share, mainly on the time value of money. At current prices, the stock is slightly overvalued.