3382: Rising Margins And Dividend Increases Will Support Share Price

Analysts have modestly reduced their price target on Seven & i Holdings from ¥2,900 to approximately ¥2,800, citing a more tempered outlook for revenue growth. Expectations for profit margins and valuation multiples have also been adjusted to a more conservative, yet still supportive, profile.

What's in the News

• Revised guidance for the fiscal year ending February 28, 2026, lowers expected revenues from operations to JPY 10,560,000 million but raises forecast net income to JPY 265,000 million, implying stronger profitability despite a softer top line (company guidance).
• Operating income guidance has been trimmed to JPY 404,000 million from JPY 424,000 million, while projected net income per share increases to JPY 107.66 from JPY 102.92. This signals improved earnings per share efficiency (company guidance).
• The company increased its second quarter dividend to JPY 25.00 per share from JPY 20.00 a year earlier, with payment scheduled to begin on November 14, 2025, reinforcing its shareholder return stance (dividend announcement).
• Seven & i Holdings recently held an Analyst and Investor Day, providing updated strategic and financial commentary to the market (company event).

Valuation Changes

• Fair value estimate was reduced modestly from approximately ¥2,900 to about ¥2,796, indicating a slightly lower intrinsic value assessment.
• The discount rate edged down slightly from 6.07% to 5.97%, reflecting a marginally lower assumed risk or cost of capital.
• Revenue growth was lowered significantly from 7.50% to 3.32%, signaling a more cautious outlook on top line expansion.
• The net profit margin was raised moderately from 2.43% to 2.65%, implying expectations for improved profitability despite slower revenue growth.
• The future P/E ratio was reduced meaningfully from about 26.0x to 20.7x, pointing to a more conservative valuation multiple applied to forward earnings.