6594: Future R&D Reorganization And Urban Air Mobility Projects Will Unlock Upside Potential

Analysts have reduced their price target on Nidec to ¥4,100 from about ¥4,722, citing updated assumptions that reflect a higher discount rate, slightly stronger revenue growth and profit margins, and a lower future P/E multiple in their models.

What's in the News

• Nidec plans organizational changes effective January 1, 2026, including separating the Technology Strategy Planning Department to create a CTO Technology Planning Department and an Intellectual Property Department within its R&D structure (company announcement).
• The company will set up an Urban Air Mobility Project and an Inverter System Development Project within the Nidec Product Technology R&D Center, with Development Department 1 moving under the Urban Air Mobility Project (company announcement).
• Within the Automotive Motor & Electronic Control Business, Nidec will establish a Business Strategy and Sales Department in the Business Strategy and Sales Division, Automotive Motor & Electronic Control Organic Business Unit (company announcement).
• The Management Department in the Inverter Business Group, Automotive Motor & Electronic Control Business Unit, will be renamed the Administration Department (company announcement).
• Nidec has been dropped from the Nikkei 225 Index, changing its inclusion in that benchmark index (index announcement).

Valuation Changes

• The consensus analyst price target now stands at ¥4,100, compared with the prior figure of about ¥4,722.
• The discount rate in the updated model is 8.27%, versus 7.46% previously, indicating a slightly higher required return in the analysis.
• The revenue growth assumption is now 6.04%, compared with 5.28% in the earlier model.
• The net profit margin is modeled at 9.90%, up from 9.43% in the prior set of assumptions.
• The future P/E multiple assumption has shifted to 19.15x from 23.33x in the previous valuation framework.