On Monday, JPMorgan (NYSE:JPM) upgraded Yamaha Motor Co., Ltd. (7272:JP) (OTC: YAMHF) stock from Neutral to Overweight and increased the price target to ¥1,700 from the previous ¥1,300. The upgrade reflects a positive outlook on the company's marine and motorcycle segments.
The firm anticipates a turnaround in the marine segment, particularly in the US outboard engine business, where inventory adjustments are expected to conclude. Additionally, the trend toward larger outboard engines is projected to contribute to growth in this area.
In the motorcycle business, Yamaha Motor is expected to sustain a near double-digit profit margin. This optimism is underpinned by structural growth in key markets such as India and Brazil, along with the implementation of the ASEAN premium strategy.
JPMorgan is also looking forward to Yamaha Motor's next medium-term business plan, which is anticipated to be released alongside full-year results. Key points of interest for the firm include potential increases in shareholder returns and the acceleration in the unwinding of cross-shareholdings.
The upgrade comes at a time when concerns around large-cap automotive stocks are growing. JPMorgan positions Yamaha Motor as a "safe haven" within the sector, indicating a level of resilience or stability in comparison to its peers.
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