Daiwa Securities Group stock has been choppy in recent weeks, with a roughly 3% slip over 7 days but a strong 22% gain over 3 months, and it went into today priced for optimism at ¥1,774. The new Q1 FY2027 print lands with a clear headline. Profit attributable to owners hit ¥56.4b and basic earnings per share reached ¥40.68. The real story is the pressure on valuation. The P/E multiple of 12.3x now sits above domestic capital markets peers, while a discounted cash flow estimate of ¥1,384 points to a richer price tag.
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Q1 2027 Earnings Summary
- Total Revenue (Q1 2027 vs. Q1 2026): ¥253,103m vs. ¥160,993m (up about 57%)
- Net Income Excl. Extra Items (Q1 2027 vs. Q1 2026): ¥56,414m vs. ¥31,237m (up about 81%)
- Basic EPS (Q1 2027 vs. Q1 2026): ¥40.68 vs. ¥22.20 (up about 83%)
- Trailing 12 Month Net Income Excl. Extra Items (Q1 2027 vs. Q1 2026): ¥200,458m vs. ¥161,612m (up about 24%)
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Daiwa’s earnings strength backs wealth pivot story
The bullish narrative around Daiwa Securities Group centers on a shift toward steadier, asset based earnings that can carry results even if pure trading cools. Q1 gives that story real support. Wealth Management’s asset based revenue reached a record ¥35.8b and wrapped accounts hit ¥6.765t in contract AUM with ¥237.6b of net inflows. That helped base income reach ¥62.8b, already running well ahead of the midterm plan’s final year target of ¥150b. Asset Management adds another proof point. Publicly offered trust AUM moved past ¥43t and real estate AUM topped ¥1.8t, which was the FY2030 goal. Overseas ordinary income of ¥13.1b, a record, also runs counter to the idea that international expansion is only a drag.
Structural risks and cost creep still shadow Daiwa
The cautious narrative argues that fee dependence, overseas expansion and rising costs could cap Daiwa Securities Group’s upside. Q1 partly validates those concerns. SG&A rose to ¥142.8b, up 3.3%, driven by higher trading related commissions and wage and bonus accruals. That means the cost base is inching higher just as the group leans into technology, cybersecurity and overseas build out. Real estate and alternative asset management benefited from exits and capital gains. That is helpful but not a guaranteed repeat. Management also flagged geopolitical pressure on European deal activity and potential capital strain from the ORIX Bank acquisition with AT1 (Additional Tier 1, a form of bank capital) issuance under consideration. These factors support the view that higher and more complex capital needs, plus uneven regional trends, still sit in the way of a clean re rating story.
Access the analyst estimates for Daiwa Securities Group.Stay Ahead Of Your Next Move
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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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