Japan Logistics Fund (TSE:8967): Valuation Check After New Buyback and Cancellation Plan for 16,000 Units

Japan Logistics Fund (TSE:8967) just refreshed its capital playbook, with the board approving a new buyback and full cancellation of up to 16,000 units to support long term distribution growth.

See our latest analysis for Japan Logistics Fund.

The latest buyback decision lands after a solid run, with the share price delivering an 18.5% year to date share price return and a 24.4% one year total shareholder return. This suggests momentum is building as investors price in steadier cash flows and disciplined capital recycling.

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With units already up strongly this year and trading only a modest distance from analyst targets, the new buyback raises a key question: Is Japan Logistics Fund still undervalued, or is the market already pricing in future growth?

Price-to-Earnings of 25x: Is it justified?

On a trailing basis, Japan Logistics Fund trades at a price-to-earnings ratio of 25x, which frames how the market is valuing each yen of current earnings at the last close of ¥104,900.

The price-to-earnings multiple compares unit price to per unit earnings, making it a core yardstick for REITs where steady distributable income is central to the investment case.

For Japan Logistics Fund, the 25x multiple looks supportive when set against some peers at 33.6x and the broader Industrial REITs group at 28.1x. It still sits slightly above the estimated fair price-to-earnings ratio of 24.1x, suggesting only a narrow margin before valuations appear stretched.

Against the Asian Industrial REITs industry average of 18.5x, however, the fund commands a clear premium, implying investors are paying significantly more for each yen of earnings than the wider regional peer set.

Explore the SWS fair ratio for Japan Logistics Fund

Result: Price-to-Earnings of 25x (ABOUT RIGHT)

However, risks remain, including negative revenue and earnings growth, or a broader rerating of Asian industrial REITs that erodes the valuation premium of Japan Logistics Fund.

Find out about the key risks to this Japan Logistics Fund narrative.

Another View: Cash Flows Point to a Richer Price

Our DCF model paints a less forgiving picture, with Japan Logistics Fund trading around ¥104,900 compared to an estimated fair value closer to ¥96,819. That implies the units are modestly overvalued and raises the question of whether recent momentum is running ahead of the fundamentals.

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 Japan Logistics Fund 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 901 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 Japan Logistics Fund Narrative

If you would rather follow your own path and put the numbers in context yourself, you can build a full narrative in just minutes: Do it your way.

A great starting point for your Japan Logistics Fund research is our analysis highlighting 2 key rewards and 3 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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