Daiwa Securities Living Investment (TSE:8986) Valuation After Upgraded 2026 Forecasts on Asset Growth

Daiwa Securities Living Investment (TSE:8986) recently updated its forecasts for the fiscal period ending March 2026, projecting higher operating revenue, income, and distributions per unit. These revisions result from finalized asset transfers and acquisitions.

See our latest analysis for Daiwa Securities Living Investment.

Momentum has been building for Daiwa Securities Living Investment over the past year, with its share price climbing nearly 27% year-to-date and delivering an impressive 33.5% total shareholder return in the past 12 months. The company's recent decisions to acquire new properties, appoint new directors, and amend its Articles of Incorporation all point to a proactive approach to growth and governance. This approach seems to be resonating with investors.

If the strategy updates here have you interested in discovering what else is gaining traction, now is an ideal time to broaden your search and explore fast growing stocks with high insider ownership

With the stock’s strong rally and upgraded outlook, investors may wonder whether Daiwa Securities Living Investment’s recent performance has already been factored into its price or if there is still an attractive buying opportunity ahead.

Price-to-Earnings of 20.5x: Is it justified?

Daiwa Securities Living Investment is trading at a price-to-earnings (P/E) ratio of 20.5x, suggesting the market values its profit stream at a premium compared to key metrics. The last close was ¥114,400, putting it below estimated fair value but above some industry averages.

The P/E ratio measures how much investors are willing to pay per yen of net earnings. For real estate investment trusts like Daiwa Securities Living Investment, this ratio helps gauge market expectations for sustainable profit generation and sector stability.

This P/E of 20.5x is more attractive than the peer average of 26.6x. This signals investors are paying less for each unit of earnings versus similar companies in the sector. However, it sits just slightly above the global residential REITs industry average of 20x. The fair P/E based on regression analysis is estimated at 22x, which the stock remains below. This further underscores its current discount in the market.

Explore the SWS fair ratio for Daiwa Securities Living Investment

Result: Price-to-Earnings of 20.5x (UNDERVALUED)

However, investors should remain mindful of recent annual revenue and net income declines. These factors could challenge sustained growth despite the company’s positive momentum.

Find out about the key risks to this Daiwa Securities Living Investment narrative.

Another View: SWS DCF Model Signals Deeper Value

Taking a different perspective, our DCF model points to a significantly higher estimate of Daiwa Securities Living Investment's fair value than its current market price. This approach suggests the stock could be undervalued, which challenges the view offered by the price-to-earnings ratio and raises the question of whether the market is missing something fundamental.

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 Daiwa Securities Living Investment 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 Daiwa Securities Living Investment Narrative

If you see things differently or want to analyze the numbers for yourself, you can quickly craft your own take in just a few minutes with Do it your way.

A great starting point for your Daiwa Securities Living Investment research is our analysis highlighting 3 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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