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6594: Future R&D Reorganization Will Weigh On Earnings Quality

Rising Inflation And Global Tensions Will Squeeze Margins

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6594
AnalystLowTarget
Not Invested
Published 11 Jun 2025
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Update shared on 19 Feb 2026

Fair value Decreased 31%
Next
28 May
JP¥2,728.00
AnalystLowTarget's Fair Value
JP¥1,800.00
51.6% overvalued intrinsic discount
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1Y
-5.5%
7D
4.7%

Analysts have revised their price target on Nidec from ¥2,600 to ¥1,800. This change reflects updated views on fair value, discount rate, revenue growth, profit margin, and future P/E assumptions.

What's in the News

  • Nidec plans organizational changes effective January 1, 2026, focused on reshaping its research and development structure. (Key Developments)
  • The Technology Strategy Planning Department will be separated, with a new CTO Technology Planning Department and an Intellectual Property Department to be created. (Key Developments)
  • Within the Nidec Product Technology R&D Center, an Urban Air Mobility Project and an Inverter System Development Project will be set up, and Development Department 1 will move under the Urban Air Mobility Project. (Key Developments)
  • A new Business Strategy and Sales Department will be created in the Business Strategy and Sales Division of the Automotive Motor & Electronic Control Organic Business Unit. (Key Developments)
  • The Management Department in the Inverter Business Group within the Automotive Motor & Electronic Control Business Unit will be renamed the Administration Department. (Key Developments)

Valuation Changes

  • Fair Value: reduced from ¥2,600 to ¥1,800, a cut of around 31%, indicating a lower assessed equity value per share.
  • Discount Rate: moved higher from 7.32% to 8.34%, implying a slightly higher required return in the updated model.
  • Revenue Growth: adjusted from 2.06% to 2.47%, reflecting a modestly higher assumed growth rate for future ¥ revenue.
  • Net Profit Margin: revised from 7.92% to 7.46%, pointing to a slightly leaner earnings profile on future ¥ sales.
  • Future P/E: brought down from 16.74x to 12.49x, indicating a lower valuation multiple applied to expected earnings.

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