Teijin’s first quarter earnings return to profit
Teijin (TSE:3401) drew fresh attention after first quarter results to June 30, 2026 reported net income of ¥45,106 million, compared with a net loss of ¥740 million a year earlier.
See our latest analysis for Teijin.
Teijin’s recent first quarter earnings and the board meeting on July 29 to consider the sale of shares held by untraceable shareholders have coincided with a 30.60% year to date share price return and a 43.09% 1 year total shareholder return, which suggests that momentum has recently been building.
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Teijin now trades above the average analyst price target, yet still sits at a discount to some intrinsic value estimates. After this sharp rebound, is the market being too cautious or already too optimistic on the stock?
Most Popular Narrative: 3.1% Overvalued
Teijin closed at ¥1,752 compared with a widely followed fair value narrative of ¥1,700. That small gap is rooted in a detailed story about how the business mix and earnings profile could change over time.
The shift to a customer issue driven business model across Apparel & Industries, Healthcare & Life Solutions, Electronics & Energy and Specialty Materials aims to move Teijin toward higher value solutions rather than commoditized materials. This is intended to support more resilient revenue growth and a higher adjusted operating income base.
The core of this Teijin narrative is earnings quality. It focuses on steadier revenue, higher margins and a future profit multiple that assumes investors will pay a higher price for those improvements. It also highlights the growth and profitability assumptions used in that fair value estimate and the role that a discount rate of 6.77% plays in shaping the result.
Result: Fair Value of ¥1,700 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Teijin still faces pressure from past impairment losses and ongoing restructuring, which could limit any improvement in earnings quality if progress stalls.
Find out about the key risks to this Teijin narrative.
Another View on Teijin’s Valuation
The first narrative frames Teijin as slightly overvalued against a ¥1,700 fair value, yet our DCF model points in the opposite direction. On that view, the stock trades about 15.1% below an estimated future cash flow value of ¥2,062.93. Which story do you think fits the cash flows better?
Look into how the SWS DCF model arrives at its fair value.
Next Steps
After weighing Teijin’s rebound and mixed valuation signals, it may be useful to move quickly and test the numbers yourself against the full story. To frame that decision with both caution and optimism, start by reviewing the 3 key rewards and 1 important warning sign
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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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