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Nippon Telegraph & Telephone Corp 9432

Morningstar Rating
JPY 181.10 +0.40 (0.22%)
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Company Report

NTT: Asset Sales Required to Meet Fiscal 2023 Guidance; Valuation Down to JPY 172 From JPY 176

We reduced our fair value estimate for Nippon Telegraph and Telephone, or NTT, to JPY 172 per share from JPY 176 following a third-quarter fiscal 2023 result (quarter-ended December 2023) that was below our expectations. Our narrow moat rating for NTT based on efficient scale is also retained with the firm now earning ROIC above WACC. We see the shares as broadly fairly valued at these levels.

Price vs Fair Value

9432 is trading at a 5% premium.
Price
JPY 180.70
Fair Value
JPY 375.00
Uncertainty
Low
1-Star Price
JPY 173.00
5-Star Price
JPY 721.20
Economic Moat
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Capital Allocation
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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.

Is it the right time to buy, sell, or hold?
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News

Trading Information

Previous Close Price
JPY 180.70
Day Range
JPY 180.50182.30
52-Week Range
JPY 154.80192.90
Bid/Ask
JPY 181.00 / JPY 181.10
Market Cap
JPY 15.23 Tril
Volume/Avg
125.9 Mil / 158.6 Mil

Key Statistics

Price/Earnings (Normalized)
13.41
Price/Sales
1.17
Dividend Yield (Trailing)
2.71%
Dividend Yield (Forward)
2.77%
Total Yield
4.83%

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)
13.4120.80
Price/Book Value
1.651.804.02
Price/Sales
1.170.711.56
Price/Cash Flow
5.2214.908.27
Price/Earnings
9432
4755
9434

Financial Strength

Metric
9432
4755
9434
Quick Ratio
0.7528.790.70
Current Ratio
0.9828.790.75
Interest Coverage
16.23−3.909.48
Quick Ratio
9432
4755
9434

Profitability

Metric
9432
4755
9434
Return on Assets (Normalized)
4.84%−1.51%3.66%
Return on Equity (Normalized)
14.22%−34.71%24.19%
Return on Invested Capital (Normalized)
6.31%−5.18%5.95%
Return on Assets
9432
4755
9434
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