Morningstar: Nomura Comprehensive Research expects to achieve a recovery in profit margins

Morningstar analyst Makoto Naito stated in a report that Nomura Research Institute's plan to divest its overseas Industrial IT business is a reasonable move, as the department's losses appear to be mainly structural. After the restructuring, he expects the contraction of the overseas income portfolio with low profit margins, leading to an overall increase in operating profit margins. Naito still has confidence in the company's long-term profit margin expansion, citing the resilience of its domestic financial IT division. He lowered the forecast for the fiscal year to reflect the struggles of the overseas business, but raised the forecast for the operating profit margin for the 2029 fiscal year given management's willingness to exit unprofitable businesses. Morningstar maintains its fair value estimate of 6,200 Japanese yen, but adds that the stock price is undervalued because the market underestimates its recovery prospects. The stock closed at 4,287.00 Japanese yen.