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    Nitto Kogyo (TSE:6651) Could Be 30% Undervalued Following First Quarter Earnings

    Simply Wall St·08/15/2026 08:20:32
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    Why Nitto Kogyo’s Latest Earnings Matter For Investors

    Nitto Kogyo (TSE:6651) reported first quarter 2026 earnings that included sales of ¥45,536 million and net income of ¥1,554 million, with earnings per share of ¥40.96 from continuing operations.

    See our latest analysis for Nitto Kogyo.

    Against the first quarter earnings release on 6 August 2026, Nitto Kogyo’s share price has moved to ¥4,545, with a 1 day share price return of 1.79% and year to date share price return of 12.08%. Over the past year the total shareholder return of 36.53% and 5 year total shareholder return of 237.14% point to strong long term gains, even though the 90 day share price return has fallen 8.73%, which suggests momentum has cooled recently.

    If the latest move in Nitto Kogyo has you thinking more broadly about opportunities in power and electrical infrastructure, it can be useful to scan 38 power grid technology and infrastructure stocks.

    The share price has climbed, yet short term momentum has cooled, while internal estimates suggest Nitto Kogyo may sit below intrinsic value. How wide is that gap, and where does fair value really land now?

    Price-to-Earnings of 14.2x for Nitto Kogyo: Is it justified?

    Nitto Kogyo is currently on a P/E of 14.2x, which sits above its own estimated fair P/E of 12.8x and slightly above the JP Electrical industry average of 14x.

    The P/E multiple compares the share price to earnings per share and is a quick way to see how much investors are paying for each unit of profit. For a business like Nitto Kogyo, which manufactures electrical and mechanical equipment and reports high quality earnings with 6.1% net profit margins, this yardstick helps you gauge how the market is weighing its profit profile against peers.

    The data suggests investors are paying a premium to the level that the fair P/E calculation indicates, and even a touch more than the wider Electrical industry. At the same time, the P/E still sits well below the peer average of 19.6x. This points to a market that is not assigning the kind of higher earnings multiple some similar companies currently carry, and that the fair P/E level of 12.8x is a reference point the valuation could potentially gravitate toward over time.

    Explore the SWS fair ratio for Nitto Kogyo

    Result: Price-to-Earnings of 14.2x (OVERVALUED)

    However, the recent 8.73% decline over 90 days and an intrinsic discount of 29.85% both suggest the current Nitto Kogyo narrative could face valuation pushback.

    Find out about the key risks to this Nitto Kogyo narrative.

    Another View On Nitto Kogyo’s Valuation

    While the P/E of 14.2x suggests Nitto Kogyo is a little expensive relative to its fair ratio of 12.8x and slightly above the JP Electrical industry on 14x, it still trades below the peer average of 19.6x. That mix of premium and discount raises a practical question for you: Is the current price leaving much room for error?

    See what the numbers say about this price — find out in our valuation breakdown.

    TSE:6651 P/E Ratio as at Aug 2026
    TSE:6651 P/E Ratio as at Aug 2026

    Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Nitto Kogyo 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 26 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

    Next Steps

    With mixed signals around Nitto Kogyo’s valuation and recent momentum, it helps to see the balance of risks and rewards for yourself. To weigh both sides before you act, start with the 2 key rewards and 1 important warning sign.

    Looking For More Investment Ideas Beyond Nitto Kogyo?

    If Nitto Kogyo has sharpened your focus, now is the time to broaden your watchlist using targeted stock ideas from the Simply Wall Street Screener.

    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.