Nomura (NYSE:NMR) Posts Earnings Results, Beats Expectations By $0.07 EPS

Nomura (NYSE:NMR) posted its quarterly earnings results on Wednesday. The financial services provider reported $0.30 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.23 by $0.07, Zacks reports. Nomura had a net margin of 7.64% and a return on equity of 9.70%. The business had revenue of $4.19 billion for the quarter, compared to analyst estimates of $3.49 billion.

Here are the key takeaways from Nomura’s conference call:

• Strong first-quarter performance: All divisions increased revenue and pretax income sequentially, lifting ROE to 15.4%, the highest since 2020. Nomura said structural reforms have improved the stability and balance of its earnings base.
• Wealth Management continued its momentum, with revenue up 9% and pretax income up 16% for a fifth consecutive quarterly increase. Recurring revenue, recurring-asset net inflows, and recurring assets all reached records, supported by strong demand for investment trusts and discretionary products.
• Wholesale delivered record first-quarter results, with revenue up 20% and pretax income up 116%, driven particularly by a 41% increase in equities revenue. International businesses also reached record combined pretax income, with Asian equities, emerging-market FX, credit, and International Wealth Management contributing strongly.
• Investment Management posted its best results since its 2021 establishment, as revenue rose 14% and pretax income increased 148%. Record assets under management, higher asset-management fees, emerging-market fund inflows, and better performance at American Century Investments supported the improvement.
• Management cautioned that Wholesale revenue slowed somewhat in July after the exceptionally strong first quarter, with seasonal summer factors and market corrections weighing on activity. Compensation expenses may rise with performance, while EMEA remains loss-making and headquarters relocation costs will be incurred over this and the next fiscal year.

Nomura Trading Down 1.3%

Shares of NYSE:NMR traded down $0.12 during trading on Thursday, reaching $9.54. The stock had a trading volume of 935,271 shares, compared to its average volume of 1,622,332. Nomura has a 52 week low of $6.59 and a 52 week high of $10.06. The company has a debt-to-equity ratio of 7.38, a quick ratio of 1.08 and a current ratio of 1.08. The firm’s fifty day moving average is $8.98 and its 200 day moving average is $8.64. The stock has a market cap of $28.00 billion, a price-to-earnings ratio of 11.93, a P/E/G ratio of 2.76 and a beta of 0.69.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. Osaic Holdings Inc. grew its stake in Nomura by 1,019.0% during the second quarter. Osaic Holdings Inc. now owns 6,434 shares of the financial services provider’s stock worth $42,000 after purchasing an additional 5,859 shares during the period. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC acquired a new stake in Nomura in the fourth quarter worth $76,000. Sei Investments Co. bought a new stake in Nomura in the 2nd quarter valued at about $67,000. EP Wealth Advisors LLC acquired a new position in Nomura during the 2nd quarter worth approximately $72,000. Finally, Atlas Capital Advisors Inc. bought a new position in Nomura in the fourth quarter worth approximately $92,000. 15.14% of the stock is owned by institutional investors and hedge funds.

Key Nomura News

Here are the key news stories impacting Nomura this week:

• Positive Sentiment: Significant Q1 earnings and revenue beat: Nomura reported earnings of $0.30 per ADR, exceeding the $0.23 consensus estimate by $0.07. Revenue reached $4.19 billion, well above expectations of $3.49 billion. The results imply stronger operating performance than analysts had anticipated. Nomura earnings report
• Positive Sentiment: Analyst screening signals improved: NMR was added to Zacks’ Rank #1 “Strong Buy” lists for both momentum and value on July 30. This suggests the stock’s recent price performance, earnings outlook, and valuation metrics are screening favorably relative to peers. Zacks momentum stocks Zacks value stocks
• Positive Sentiment: Investor focus on recurring revenue: Coverage of Nomura’s earnings call highlighted record recurring revenue and strong quarterly performance, potentially supporting confidence in the company’s earnings durability. Nomura Q1 earnings highlights
• Negative Sentiment: Japanese financial-sector weakness: The Nikkei rose 0.4%, but financial shares declined. That sector pressure may be contributing to weakness in NMR and offsetting the company-specific earnings beat. Nikkei market report

Analysts Set New Price Targets

NMR has been the topic of several recent analyst reports. Nomura upgraded Nomura to a “buy” rating and set a $10.20 price target on the stock in a research note on Thursday, June 25th. Bank of America raised shares of Nomura from a “neutral” rating to a “buy” rating and set a $10.20 price objective for the company in a research note on Thursday, June 25th. Finally, Weiss Ratings upgraded Nomura from a “hold (c)” rating to a “hold (c+)” rating in a research report on Friday, July 17th. One investment analyst has rated the stock with a Strong Buy rating, three have given a Buy rating and one has given a Hold rating to the company. According to MarketBeat, Nomura currently has a consensus rating of “Buy” and a consensus target price of $10.20.

Nomura Company Profile

Nomura Holdings, Inc is a global financial services group headquartered in Tokyo, Japan, with origins dating back to 1925 when Tokushichi Nomura II established the firm as a securities business. Over the decades Nomura has grown from a domestic securities house into a multinational financial services firm by expanding its product offerings and international footprint. The company is publicly listed and operates through a network of subsidiaries and branches to serve a broad client base.

Nomura’s principal businesses encompass retail brokerage, wholesale (investment banking and global markets), and asset management.