Daiwa Securities Group (TSE:8601) Posted Strong First Quarter Results, Is It Still 7% Overvalued?
Daiwa Securities Group (TSE:8601) reported first quarter 2026 results that showed revenue of ¥434,364 million and net income of ¥56,414 million, compared with ¥326,400 million and ¥31,237 million a year earlier.
See our latest analysis for Daiwa Securities Group.
Despite the earnings release, Daiwa Securities Group’s share price of ¥1,803.5 has eased in the short term, with a 1-month share price return of 4.02% lower. However, the 90-day share price return of 21.65% and 1-year total shareholder return of 66.07% point to momentum that has built over a longer horizon.
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Given Daiwa Securities Group’s strong quarterly figures alongside a recent pullback in the share price, it raises a clear question: Are investors reassessing the fundamentals, or has sentiment simply run ahead of itself as we look at valuation next?
Most Popular Narrative: 6.7% Overvalued
At a last close of ¥1,803.5 versus a narrative fair value of ¥1,690, the most followed view sees Daiwa Securities Group trading ahead of its estimated worth, with that gap grounded in specific forecasts for revenue, margins and valuation multiples.
Ongoing recovery and record-high AUMs in both securities and real estate asset management, along with positive contributions from Global X and alternative investments, indicate effective positioning in high-margin, recurring-fee businesses and product lines benefiting from client adoption of passive investment strategies, which should structurally improve net margins and earnings resilience.
Want to see what is baked into that fair value of ¥1,690? The narrative leans on brisk revenue expansion, slimmer margins and a richer earnings multiple than the wider sector. Curious how those three pieces fit together in the model that underpins this valuation.
Result: Fair Value of ¥1,690 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, the Daiwa Securities Group narrative still faces pressure from its heavy focus on Japan and ongoing losses in certain overseas operations, particularly in Europe.
Find out about the key risks to this Daiwa Securities Group narrative.
Another View on Daiwa Securities Group’s Valuation
While the Daiwa Securities Group narrative fair value of ¥1,690 points to a 6.7% premium at the current share price of ¥1,803.5, the current P/E of 12.5x sits below the fair ratio of 16.8x and above the JP Capital Markets industry at 11.8x and peers at 9.8x. That mix hints at valuation risk if sentiment cools, but also a possible cushion if the market leans toward the higher fair ratio. Which side of that trade-off do you think matters more for your own thesis?
For a closer look at how this pricing stacks up against sector and peer benchmarks, See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
If the mixed tone on Daiwa Securities Group has you on the fence, now is a good time to review the facts yourself and decide where you stand. To see how the positives stack up against the potential downsides in one place, start with the 3 key rewards and 1 important warning sign.
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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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