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East Japan Railway Co 9020

Morningstar Rating
JPY 2,841.00 +13.00 (0.46%)
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Company Report

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.

Price vs Fair Value

9020 is trading at a 638% premium.
Price
JPY 2,841.00
Fair Value
JPY 7,215.00
Uncertainty
Medium
1-Star Price
JPY 8,436.00
5-Star Price
JPY 6,213.00
Economic Moat
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Capital Allocation
Pgydngsm

Bulls Say, Bears Say

Bulls

JR East generates solid returns from railway services, with an added boost from retail and property development in and around the stations.

Bears

Returns are at risk from Japan's aging demographics and shrinking population, a key earnings headwind.

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News

Trading Information

Previous Close Price
JPY 2,828.00
Day Range
JPY 2,808.002,849.50
52-Week Range
JPY 2,520.003,108.33
Bid/Ask
JPY 2,840.50 / JPY 2,843.50
Market Cap
JPY 3.21 Tril
Volume/Avg
2.0 Mil / 3.2 Mil

Key Statistics

Price/Earnings (Normalized)
5.26
Price/Sales
1.16
Dividend Yield (Trailing)
1.67%
Dividend Yield (Forward)
1.86%
Total Yield
1.64%

Company Profile

East Japan Railway Company, or JR East, is the largest railway operator in Japan. It was originally established when the government-owned nationwide railway operator underwent a six-way territorial split in 1987, though it wasn't fully privatized until 2002. It runs both long distance bullet trains, known as Shinkansen, and shorter municipal train routes around and from Tokyo. Its 7,400 kilometers of rail track covers half of Japan's population and a third of the country's land area. Two thirds of revenue is from transportation, with most of the rest from retail operations and real estate investments.
Sector
Industrials
Industry
Railroads
Stock Style Box
Large Growth
Total Number of Employees
93,425

Competitors

Valuation

Metric
9020
9142
9022
Price/Earnings (Normalized)
5.268.399.86
Price/Book Value
1.161.200.83
Price/Sales
1.161.262.02
Price/Cash Flow
4.425.894.99
Price/Earnings
9020
9142
9022

Financial Strength

Metric
9020
9142
9022
Quick Ratio
0.740.541.50
Current Ratio
0.921.043.97
Interest Coverage
5.2933.367.37
Quick Ratio
9020
9142
9022

Profitability

Metric
9020
9142
9022
Return on Assets (Normalized)
3.01%5.68%5.33%
Return on Equity (Normalized)
11.15%13.70%13.13%
Return on Invested Capital (Normalized)
4.67%7.42%6.70%
Return on Assets
9020
9142
9022
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