Glory (TSE:6457) Valuation in Focus After Upgraded Outlook, Dividend Boost, and Analyst Rating Lift

Glory (TSE:6457) shares are in focus after the company raised its earnings outlook for the year ending March 2026. The company also announced a bump in its second quarter dividend payout.

See our latest analysis for Glory.

Glory’s improved earnings forecast and a bump in the interim dividend put a fresh spotlight on the stock, with this week’s rating upgrade from Iwai Cosmo Securities adding fuel. Momentum has been building all year; the share price is now up over 51% year-to-date, and long-term shareholders have benefited from a striking 52% total return over the past twelve months as growth expectations and risk perception have both shifted in Glory’s favor.

If this kind of momentum has you wondering what else is thriving, it’s a great time to broaden your scope and discover fast growing stocks with high insider ownership

With Glory’s shares surging and optimism reflected in recent analyst upgrades, investors are now left to consider whether the market has truly captured the company’s potential or if there is still a genuine buying opportunity ahead.

Price-to-Earnings of 17.9x: Is it justified?

Glory’s shares are trading at a price-to-earnings (P/E) ratio of 17.9x, which puts the current valuation above both its peer group average and the broader Machinery industry levels. At the last close price of ¥3878, investors are effectively paying a premium for Glory’s future earnings compared to similar Japanese companies.

The P/E ratio measures how much investors are willing to pay for each unit of net income. It is a popular way to gauge whether a stock is cheap or expensive relative to other companies. Higher multiples can sometimes reflect stronger growth expectations or market leadership, but can also suggest the stock is getting ahead of itself based on fundamentals.

In this case, the market is valuing Glory at 17.9x earnings, well above the peer average of 11.5x and the Machinery sector average of 12.3x. The estimated fair price-to-earnings ratio for the business is 17.7x. This sits just below the current market level and signals that there may be limited room for multiple expansion from here.

Explore the SWS fair ratio for Glory

Result: Price-to-Earnings of 17.9x (OVERVALUED)

However, slower revenue growth or any slip in annual net income improvements could quickly diminish the current market optimism around Glory’s stock.

Find out about the key risks to this Glory narrative.

Another View: What Does the DCF Model Say?

While the P/E ratio shows Glory is trading at a premium, the SWS DCF model offers a strikingly different perspective. According to this approach, Glory’s current share price is actually 23.5% below its estimated fair value. This suggests the market may be overlooking some upside potential. Could the answer lie somewhere between these two views?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Glory for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 927 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Glory Narrative

If you have a different take on Glory’s prospects or want to see how your analysis stacks up, you can assemble your own perspective in just a few minutes. Do it your way

A great starting point for your Glory research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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