JPMorgan-Yamaha (7951) Model update Revising price target to ¥1,167 ...-110555461

Asia Pacific Equity Research01 October 2024J P M O R G A Nwww.jpmorganmarkets.comYamaha (7951)Model update: Revising price target to ¥1,167 due to stock splitNeutral7951.T, 7951 JPPrice (01 Oct 24):¥1,255Price Target (Dec-25):¥1,167Japan Equity ResearchTechnology - Consumer/Industrial/SPE/PrecisionJunya Ayada AC(81-3) 6736 8631junya.ayada@jpmorgan.comMio Shikanai(81-3) 6736 1313mio.shikanai@jpmorgan.comJPMorgan Securities Japan Co., Ltd.Style ExposureWe revise our price target to ¥1,167 from ¥3,500 to reflect a 3-for-1 stock split. Our earnings estimates are unchanged. The effective date of the stock split is October 1, 2024. See page 5 for analyst certification and important disclosures, including non-US analyst disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.Sources for: Style Exposure – J.P. Morgan Quantitative and Derivatives Strategy; all other tables are company data and J.P. Morgan estimates.2JPMorgan Securities Japan Co., Ltd.Junya Ayada AC(81-3) 6736 8631junya.ayada@jpmorgan.comAsia Pacific Equity Research01 October 2024J P M O R G A NPrice PerformanceYTD1m3m12mAbs15.6%7.6%0.8%-7.9%Rel1.9%8.4%5.5%-24.2%Company DataShares O/S (mn)49452-week range (¥)1,401-835Market cap ($ bn)4.3Exchange rate 143.63Free float(%) 86.1%3M - Avg daily vol (mn)2.963M - Avg daily val ($ mn)22.9Volatility (90 Day) 48Index TOPIXBBG BUY|HOLD|SELL 3|5|0Key Metrics (FYE Mar)¥ in millions2024/3A2025/3E2026/3E2027/3EFinancial EstimatesRevenue462,866467,300466,500475,900EBITDA50,02359,20061,60065,600EBIT29,00044,00046,00049,500Net income29,64235,10035,80038,400Reported EPS175.6870.9972.4177.66BBG EPS55.4669.6975.85-Cashflow from operations43,83658,29554,72553,531FCFF14,39337,33332,87531,680Margins and GrowthRevenue Growth Y/Y (%)2.5%1.0%-0.2%2.0%EBIT margin6.3%9.4%9.9%10.4%EBIT Growth-37.6%51.7%4.5%7.6%EBITDA margin10.8%12.7%13.2%13.8%EBITDA Growth Y/Y (%)-23.9%18.3%4.1%6.5%Net margin6.4%7.5%7.7%8.1%Fully Diluted EPS growth-21.6%-59.6%2.0%7.3%RatiosEffective Tax Rate20.9%26.1%26.0%26.0%Interest coverNMNMNMNMNet debt/EquityNMNMNMNMNet debt/EBITDANMNMNMNMROE6.1%6.7%6.6%6.7%ValuationFCFF yield6.8%6.0%5.3%5.1%Dividend yield5.9%2.0%2.0%2.0%EV/Revenue1.11.01.00.9EV/EBITDA10.28.17.56.7P/E7.117.717.316.2Summary Investment Thesis and ValuationInvestment ThesisNear term, we will focus on the progress in clearing channel inventory in China and the US/European market. If inventory normalizes in this fiscal year, the possibility of profit growth from next fiscal year onward would increase. Over the longer term, we will watch possibilities such as renewed growth of the Chinese market, growth contribution from emerging markets, and an increase in the company’s market share in guitars. ValuationOur Dec