Nomura Holdings, Inc. TSE:8604
Nomura : Outlook for FY26–27 corporate earnings
Source: MarketScreener
News Release
Outlook for FY26-27 corporate earnings
Quarterly Update
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Market Strategy Research Dept Equity Research Dept
Nomura Securities Co., Ltd.
ContentsSummary and major assumptions 3
Contributions to recurring profit growth by sector 5
Revisions to recurring profit estimates (versus 2 June) 7
Total dividends and share buybacks, percentage of companies raising, lowering, resuming, discontinuing, or making no change to dividends ...
. 9
Revision index for the Russell/Nomura Large Cap Index 10
Reference
Russell/Nomura Large Cap Index: earnings indicators 11
Recurring profits by sector 13
Percentage change in quarterly sales and profits 14
Valuation indicators 15
What are the Russell/Nomura Japan Equity Indexes? 16
Summary and major assumptionsOur analysts forecast sharp sales growth of 10.2% and recurring profit growth of 21.4% in FY26
We have aggregated FY26-27 earnings forecasts by Nomura analysts for constituents of the Russell/Nomura Large Cap Index (forecasts for sales and operating profits exclude financials, same basis hereafter). Our analysts forecast FY26 sales growth of 10.2% y-y, operating profit growth of 37.0%, recurring profit growth of 21.4%, and after-tax profit growth of 24.6%. Versus the previous such exercise conducted on 2 June, they have raised their sales growth forecast by 3.9ppt, their operating profit growth forecast by 18.2ppt, their recurring profit growth forecast by 17.2ppt, and their after-tax profit growth forecast by 18.7ppt. The differences between growth rates for operating profits and recurring/after-tax profits relates to SoftBank Group, which does not feature in operating profit growth data because it does not disclose operating profits.
We expect semiconductor and AI-related demand to remain strong in FY26, and think that electrical machinery & precision equipment will drive profit growth at major companies. We also expect profits to rise at major banks in particular as a result of rising interest rates in Japan. While we assume that crude oil prices will rise sharply versus FY25 as a result of tensions in the Middle East, we think that the negative impact of higher input costs will be smaller than we had assumed at the time of our previous survey.
Our analysts forecast full-year sales up 4.2% and recurring profits up 12.0% in FY27
For major companies, our analysts forecast FY27 sales growth of 4.2% y-y, operating profit growth of 15.6%, recurring profit growth of 12.0%, and after-tax profit growth of 11.5%. Versus the previous such exercise, they have raised their sales growth forecast by 0.9ppt and their operating profit growth forecast by 0.8ppt, but lowered their recurring profit growth forecast by 0.2ppt and their after-tax profit growth forecast by 0.8ppt. The substantial upward revision to our FY26 forecast noted above has resulted in a substantial upward revision to our FY27 forecast in absolute terms. While tensions in the Middle East have been rising again recently, we assume that they will ease through FY27 and that crude oil prices will settle down. With firm demand related to semiconductors and AI, we expect sales and profits at major companies to continue to rise in FY27.
Revision index shows upward revisions predominating
The Revision Index (RI) for the Russell/Nomura Large Cap Index (which shows the difference between the percentage of companies for which estimates were raised and the percentage for which estimates were lowered) is +39.7% for September 2026 (recurring profit basis, 3 Jun-1 Sep 2026), with the number of companies for which estimates were raised much higher than the number for which estimates were lowered. Upward revisions outnumbered downward revisions for both manufacturers and nonmanufacturers.
We forecast a FY26 dividend payout ratio of 37.1%, with 77.8% of companies raising or restoring dividends
We forecast a dividend payout ratio of 37.1% in FY26, down from 39.5% in the previous such exercise. This mainly reflects substantial upward revisions to after-tax profit forecasts, however, and we also raise our forecasts for total dividends. Together with the rise in the percentage of companies hiking or restoring their dividends from 73.0% in the previous exercise to 77.8% in this one, we see no change in corporate management's focus on strengthening shareholder returns.
Fig. 1: Overview of consolidated earnings forecasts for the Russell/Nomura Large Cap Index
(%)
No. of cos | FY23 | New FY24 | FY25 | FY26E | FY27E | ||
Sales | Russell/Nomura Large Cap (ex financials) | 215 | 3.9 | 4.3 | 2.4 | 10.2 | 4.2 |
Manufacturing | 121 | 6.9 | 4.0 | 2.1 | 11.3 | 4.3 | |
Basic materials | 29 | -2.7 | 1.2 | -1.3 | 11.4 | -1.3 | |
Processing | 64 | 10.6 | 4.2 | 2.8 | 11.8 | 6.2 | |
Nonmanufacturing (ex financials) | 94 | 0.1 | 4.7 | 2.7 | 8.8 | 4.0 | |
Russell/Nomura Small Cap (ex financials) | 935 | 4.0 | 5.4 | 4.3 | 8.2 | 4.1 | |
Operating profits | Russell/Nomura Large Cap (ex financials) | 215 | 13.1 | 3.9 | 0.2 | 37.0 | 15.6 |
Manufacturing | 121 | 7.6 | 3.9 | -3.5 | 53.3 | 16.4 | |
Basic materials | 29 | -18.9 | 4.8 | 0.1 | 38.5 | 7.1 | |
Processing | 64 | 22.0 | 2.0 | -11.3 | 64.1 | 20.8 | |
Nonmanufacturing (ex financials) | 94 | 23.7 | 4.1 | 6.5 | 11.2 | 13.8 | |
Russell/Nomura Small Cap (ex financials) | 935 | 17.1 | 16.1 | 10.1 | 15.0 | 8.5 | |
Recurring profits | Russell/Nomura Large Cap | 242 | 15.0 | 9.0 | 10.4 | 21.4 | 12.0 |
Russell/Nomura Large Cap (ex financials) | 215 | 10.9 | 4.3 | 6.6 | 22.5 | 12.1 | |
Manufacturing | 121 | 12.3 | 0.1 | -3.3 | 51.8 | 14.4 | |
Basic materials | 29 | -14.6 | -3.4 | 4.9 | 36.9 | 7.5 | |
Processing | 64 | 26.8 | -0.7 | -11.5 | 61.2 | 17.1 | |
Nonmanufacturing | 121 | 18.0 | 18.4 | 22.3 | -0.4 | 9.4 | |
Nonmanufacturing (ex financials) | 94 | 8.9 | 10.5 | 19.6 | -9.3 | 7.9 | |
Russell/Nomura Small Cap | 1,018 | 18.5 | 11.6 | 14.5 | 12.1 | 9.2 | |
Russell/Nomura Small Cap (ex financials) | 935 | 18.4 | 11.4 | 12.8 | 11.3 | 8.5 | |
Net profits | Russell/Nomura Large Cap | 242 | 14.8 | 7.5 | 7.8 | 24.6 | 11.5 |
Russell/Nomura Large Cap (ex financials) | 215 | 10.8 | 2.8 | 3.1 | 27.3 | 11.4 | |
Manufacturing | 121 | 15.8 | -4.6 | -9.6 | 68.4 | 14.3 | |
Basic materials | 29 | -17.7 | -1.5 | 4.8 | 42.0 | 7.4 | |
Processing | 64 | 29.3 | -5.9 | -20.2 | 85.8 | 16.8 | |
Nonmanufacturing | 121 | 13.7 | 20.5 | 22.3 | -3.4 | 8.4 | |
Nonmanufacturing (ex financials) | 94 | 4.1 | 14.2 | 19.3 | -13.1 | 5.7 | |
Russell/Nomura Small Cap | 1,018 | 23.7 | 16.9 | 13.6 | 18.0 | 5.0 | |
Russell/Nomura Small Cap (ex financials) | 935 | 25.5 | 17.7 | 11.2 | 18.2 | 3.7 |
Old FY26E | FY27E |
6.3 | 3.3 |
6.5 | 3.0 |
9.0 | -1.8 |
5.7 | 4.6 |
6.0 | 3.7 |
7.0 | 3.5 |
18.8 | 14.8 |
26.7 | 16.8 |
26.1 | 6.8 |
29.4 | 22.3 |
6.1 | 11.0 |
11.2 | 8.6 |
4.2 | 12.2 |
4.8 | 13.4 |
23.6 | 16.4 |
22.4 | 7.6 |
25.0 | 21.1 |
-9.5 | 8.1 |
-15.9 | 8.6 |
8.9 | 9.0 |
7.9 | 8.3 |
5.9 | 12.3 |
7.0 | 13.7 |
34.1 | 17.5 |
23.2 | 6.7 |
41.2 | 22.8 |
-12.1 | 7.3 |
-20.1 | 7.4 |
12.9 | 6.0 |
12.7 | 4.9 |
Note: Latest estimates as of 1 September 2026, previous estimates as of 2 June 2026. Source: Nomura
Fig. 2: Key earnings estimate assumptions
As of 16 Jul. 2026 As of 16 Apr. 2026
Indus trial production 2020s e year % y-y | Polic y rate (FY-end) % | WTI $/bbl | Exchange rate (avg) USD/JPY EUR/JPY | |||
FY25 | -0.1 | 0.75 | 64.9 | 150.74 | 174.81 | |
FY26E | 3.0 | 1.25 | 79.5 | 159.84 | 185.08 | |
FY27E | 1.8 | 1.50 | 70.0 | 160.00 | 185.00 | |
FY25 | H1 | -0.5 | 0.50 | 64.3 | 146.00 | 168.16 |
FY25 | H2 | 0.3 | 0.75 | 65.5 | 155.47 | 181.47 |
FY26E | H1 | 3.0 | 1.00 | 83.9 | 159.67 | 185.17 |
FY26E | H2 | 2.9 | 1.25 | 75.0 | 160.00 | 185.00 |
FY27E | H1 | 1.9 | 1.50 | 70.0 | 160.00 | 185.00 |
FY27E | H2 | 1.7 | 1.50 | 70.0 | 160.00 | 185.00 |
Indus trial production 2020 bas e year % y-y | Polic y rate (FY-end) % | WTI $/bbl | Exchange rate (avg) USD/JPY EUR/JPY | |
-0.1 | 0.75 | 64.9 | 150.70 | 174.80 |
3.5 | 1.25 | 80.0 | 155.00 | 185.00 |
1.6 | 1.50 | 70.0 | 155.00 | 185.00 |
-0.5 | 0.50 | 64.3 | 146.00 | 168.20 |
0.3 | 0.75 | 65.5 | 155.50 | 181.50 |
3.8 | 1.00 | 85.0 | 155.00 | 185.00 |
3.1 | 1.25 | 75.0 | 155.00 | 185.00 |
1.7 | 1.50 | 70.0 | 155.00 | 185.00 |
1.5 | 1.50 | 70.0 | 155.00 | 185.00 |
Note: WTI is the term-average WTI crude oil futures price. The above assumptions are not Nomura forecasts but the assumptions on which Nomura analysts base their earnings forecasts.
Source: Nomura
Contributions to recurring profit growth by sectorOverview of corporate earnings outlook for FY26
Our analysts expect profit growth at major companies involved with semiconductors, electronic parts, and electronic materials in FY26 to be driven by increased global demand related to generative AI. They expect recurring profits to increase in 16 of the 19 sectors and fall in three.
Sectors expected to make large positive contributions to overall profit growth include electrical machinery & precision equipment, financials, automobiles, chemicals, and trading companies. Forecast recurring profit growth in the electrical machinery & precision equipment sector is particularly high, in the triple digits. Our analysts expect recurring profits at semiconductor major Kioxia Holdings to rise by nearly ¥7trn owing to massive demand for NAND for AI server applications. They expect overall sector profits to double versus FY25 on strong demand for SPE and electronic parts for data centers. In the financials sector, our analysts expect major banks in particular to benefit from wider spreads as a result of rising Japanese interest rates. In the automobiles sector, our analysts expect multiple factors to affect earnings, including the winding down of structural reform costs booked in FY25, higher sales volumes in North America, and a weaker yen assumption than in FY25. In chemicals, despite concerns about cost increases caused by rising crude oil prices, our analysts expect overall sector profit growth on higher profits in the oil subsector, increasing demand for semiconductor materials, and the disappearance of transitory losses posted in FY25. For trading companies, they forecast profit growth across a wide range of areas, including energy, automobiles, and chemicals.
They expect profits to fall in sectors such as telecommunications owing to a fallback from investment fund profits in FY25 at SoftBank Group.
Overview of corporate earnings outlook for FY27
Looking further ahead to FY27, our analysts assume that crude oil prices will fall as the tensions in the Middle East ease. They expect profits to rise in 18 of 19 sectors and fall only in one, supported by growth in the global economy and generative AI-related demand.
Sectors expected to make large positive contributions to overall profit growth include electrical machinery & precision equipment, financials, services, automobiles, and utilities. In electrical machinery & precision equipment, our analysts expect demand related to semiconductors and AI to remain strong. In the financials sector, our analysts expect the rise in Japanese interest rates to slow, but think banks will be able to generate adequate spreads. In the services sector, they expect growth in human resource services and profit growth at Japan Post Holdings' financial subsidiaries. In the automobiles sector, our analysts forecast further profit growth on the disappearance of structural reform costs and easing in input prices. In the utilities sector, our analysts forecast a return to profit growth on the assumption of a decline in crude oil prices and the impact of the fuel cost adjustment system.
The only sector where our analysts expect profits to fall is trading companies, based on the assumption that crude oil prices will settle down in FY27.