5020: Dividend Payouts Will Rise As Margins Hold Despite Weaker Outlook

Analysts have raised their price target on ENEOS Holdings from ¥977 to ¥1,030, reflecting slightly improved long term revenue and margin expectations, as well as a modestly lower perceived risk profile.

What's in the News

• ENEOS raised its interim dividend for the second quarter of fiscal 2026 to JPY 17 per share from JPY 13 a year earlier, with payments scheduled to begin on December 5, 2025 and a record date of September 30, 2025 (company announcement).
• The company increased its full year fiscal 2026 total dividend forecast to JPY 34 per share from a previous forecast of JPY 30, implying a JPY 17 year end dividend versus JPY 13 a year ago (company announcement).
• Management cited shareholder returns as a key priority, stating that dividend policy reflects changes in medium term business results and prospects while aiming to maintain stability in payouts (company announcement).
• ENEOS lowered its fiscal 2026 consolidated guidance and now expects revenue of ¥11,400,000 million and operating profit of ¥290,000 million, down from the prior forecast of ¥11,700,000 million and ¥360,000 million respectively (company guidance).
• The guidance cut is driven mainly by revised assumptions for Dubai crude at 65 U.S. dollars per barrel and a weaker yen at ¥150 per dollar. These assumptions are expected to result in ¥130 billion of inventory valuation losses and to reduce profit attributable to owners to ¥135,000 million from a prior ¥185,000 million (company guidance).

Valuation Changes

• The fair value estimate has risen slightly to ¥1,030 from ¥977, reflecting a modestly higher intrinsic value assessment.
• The discount rate has fallen marginally to approximately 5.40 percent from 5.46 percent, indicating a slightly lower perceived risk profile.
• The revenue growth forecast has improved significantly, moving from a projected decline of about 18.3 percent to a near flat trajectory of roughly negative 0.3 percent.
• The net profit margin assumption has increased slightly to about 2.45 percent from 2.36 percent, implying a modestly better long term profitability outlook.
• The future P/E multiple has edged up slightly to around 10.76 times from 10.68 times, suggesting a marginally higher valuation multiple applied to forward earnings.