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Nippon Telegraph & Telephone Corp 9432

Morningstar Rating
JPY 169.40 −1.60 (0.94%)
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Company Report

NTT Continues to Cut Costs to Grow Earnings as It Invests in Data Centers

NTT is an anomaly in the telecom world. It owns a world-class wireless business in NTT DoCoMo, but its fixed-line business struggled to generate a decent return on investment for many years. NTT consolidated NTT DoCoMo in 2021 and its near-term strategies will focus on continuing to extract synergies from this consolidation in areas such as merging management, network synergies from the mobile business using some of NTT’s fixed-line core network and backhaul transmission, alignment of research and development activities and cross selling synergies. NTT DoCoMo has also made several decisions to significantly lower pricing, in 2014, 2019, and 2021 that had significant impact on its earnings. However, with NTT also consolidating of its international businesses with NTT Data we see further potential synergy and cost-reduction opportunities which should help offset the effects from what has been at times a difficult mobile market.

Price vs Fair Value

9432 is trading at a 0% discount.
Price
JPY 171.40
Fair Value
JPY 496.00
Uncertainty
Low
1-Star Price
JPY 314.00
5-Star Price
JPY 539.90
Economic Moat
Jpjjg
Capital Allocation
Tgmxkyt

Bulls Say, Bears Say

Bulls

NTT owns DoCoMo, Japan's largest wireless telecom firm, which we think is well positioned given its scale and advanced network capabilities.

Bears

While NTT has an opportunity to rationalize its workforce and take out costs, this is not always easy with Japan's labor laws.

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News

Trading Information

Previous Close Price
JPY 171.00
Day Range
JPY 169.00171.10
52-Week Range
JPY 157.60192.90
Bid/Ask
JPY 169.10 / JPY 169.40
Market Cap
JPY 14.25 Tril
Volume/Avg
164.7 Mil / 172.9 Mil

Key Statistics

Price/Earnings (Normalized)
12.69
Price/Sales
1.11
Dividend Yield (Trailing)
2.94%
Dividend Yield (Forward)
2.94%
Total Yield
5.16%

Company Profile

NTT owns NTT DoCoMo, the largest wireless operator in Japan, with 89.6 million subscribers. It also owns NTT East and NTT West, the two regional incumbent fixed-line operators in Japan, with about 23.6 million broadband lines (around 72% of which are wholesaled). The firm also provides IT and communications systems integration via NTT Communications and 52.4%-owned NTT Data.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Value
Total Number of Employees
381,653

Competitors

Valuation

Metric
9432
4755
9434
Price/Earnings (Normalized)
12.6919.51
Price/Book Value
1.561.963.77
Price/Sales
1.110.711.47
Price/Cash Flow
4.9416.747.76
Price/Earnings
9432
4755
9434

Financial Strength

Metric
9432
4755
9434
Quick Ratio
0.7527.580.70
Current Ratio
0.9827.580.75
Interest Coverage
16.23−3.519.48
Quick Ratio
9432
4755
9434

Profitability

Metric
9432
4755
9434
Return on Assets (Normalized)
4.84%−1.43%3.66%
Return on Equity (Normalized)
14.22%−35.23%24.19%
Return on Invested Capital (Normalized)
6.31%−5.32%5.95%
Return on Assets
9432
4755
9434
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