While 65% of companies expect ordinary profit growth in their FY2026 plans, pricing power and cost management have emerged as challenges. Improving balance-sheet efficiency through the use of cash and deposits and other assets is also a key focus.
In FY2026 company forecasts, 65% of companies overall, by company count, plan to achieve ordinary profit growth, with many companies forecasting revenue growth of 5.2% and ordinary profit growth of 1.4%. Excluding the impact of the three largest companies, the figures are often 5.3% for revenue growth and 6.3% for ordinary profit growth.
A breakdown of the factors behind operating profit identified pricing power, volume growth, foreign exchange, raw materials, SG&A expenses and personnel expenses, among others. In many cases, companies are absorbing rising costs through price increases and other measures. The analysis covers disclosure data from 101 companies, which Nomura Securities reclassified.
Although the impact of the situation in the Middle East remains uncertain, many companies are emphasizing their willingness to pass through higher costs in prices. Many companies are assuming USD/JPY of ¥150–152 and EUR/JPY of ¥178–180. External-demand companies are seen as having a certain degree of flexibility.
TOPIX ROE is estimated at approximately 9.1%, with the pace of growth in net assets limiting the increase in ROE. In post-earnings share price performance, companies reporting lower profits have been weak, while companies that announced share buybacks and those with bullish EPS outlooks have shown resilience.
Following an upside surprise in FY2025 results, EPS was revised slightly upward for FY2026. TOPIX EPS is expected to be 204.8 in FY2025 and 216.8 in FY2026, with further upward revisions expected for FY2027.