Assessing NSK (TSE:6471)’s Valuation After Its Strong Recent Share Price Rally

NSK (TSE:6471) has quietly outperformed the broader Japanese market this year, with the stock up around 43% year to date and more than 20% over the past 3 months.

See our latest analysis for NSK.

That move has been backed by a 20.8% 3 month share price return and a punchy 52.5% one year total shareholder return, suggesting momentum is building as investors reassess NSK’s growth prospects and risk profile around ¥964.8 per share.

If NSK’s run has you rethinking what else could surprise to the upside, this might be a good moment to explore fast growing stocks with high insider ownership.

Yet with NSK now trading above consensus analyst targets despite only modest revenue growth, investors face a key question: Is this momentum masking lingering valuation risks, or does it signal a genuine opportunity as markets price in future growth?

Most Popular Narrative Narrative: 20.1% Overvalued

With NSK closing at ¥964.8 against a narrative fair value of roughly ¥803, the current share price assumes a richer future than the model does.

The analysts have a consensus price target of ¥717.5 for NSK based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of ¥800.0, and the most bearish reporting a price target of just ¥630.0.

Read the complete narrative.

Want to see exactly how steady revenue growth, climbing margins and a higher future earnings multiple all fit together? The narrative lays out a precise roadmap, but keeps one crucial assumption hidden in plain sight.

Result: Fair Value of ¥803.33 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, weaker automotive production and ongoing softness in Europe and China could derail revenue growth and margins, undermining today's upbeat expectations.

Find out about the key risks to this NSK narrative.

Build Your Own NSK Narrative

If you see the story differently or would rather test the assumptions yourself, you can build a complete narrative in minutes: Do it your way.

A great starting point for your NSK research is our analysis highlighting 2 key rewards and 1 important warning sign 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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