Shimano Earnings: Despite Weak Guidance Suggesting Weak Recovery, Sales and Profit to Rise from 2026

Based on the assumptions of a more moderate recovery of top-line and flat capacity utilization from 2024, we cut our fiscal 2025 operating profit by about 20% to JPY 70 billion, assuming a sales increase of 5.2% and an operating margin of 14.9%, lowered from a sales increase of 12.5% and an operating margin of 17.2% as previously estimated. However, we maintain our long-term outlook on Shimano, assuming revenue to grow at a compound annual growth rate of 6.5% between 2024 and 2029 and expect the operating margin to bottom out from 14.4% in 2024 to gradually improve year by year and reach 20.2% in 2029.