Nomura (NYSE:NMR) Releases Earnings Results, Beats Estimates By $0.07 EPS

Key Points

• Nomura beat earnings expectations: The company reported quarterly EPS of $0.30, exceeding analysts’ $0.23 consensus by $0.07. Return on equity was 9.70% and net margin was 7.64%.
• Strong performance across divisions: Wealth Management, Wholesale and Investment Management all posted significant gains, with Wholesale pretax income rising 116% and Investment Management pretax income increasing 148%.
• Outlook remains mixed: Management said Wholesale activity slowed in July due to seasonal factors and market corrections, while EMEA losses, higher performance-linked compensation and relocation costs may weigh on results. Shares rose 0.9% to $9.70, and analysts maintained an overall “Buy” rating with a $10.20 average price target.

Nomura (NYSE:NMR - Get Free Report) posted its earnings results on Wednesday. The financial services provider reported $0.30 EPS for the quarter, beating analysts' consensus estimates of $0.23 by $0.07, Zacks reports. Nomura had a return on equity of 9.70% and a net margin of 7.64%.

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 Up 0.9%

NYSE:NMR traded up $0.09 during midday trading on Wednesday, hitting $9.70. 724,355 shares of the company traded hands, compared to its average volume of 1,621,055. The firm's fifty day moving average is $8.95 and its 200-day moving average is $8.64. Nomura has a 12-month low of $6.59 and a 12-month high of $10.06. The firm has a market capitalization of $28.44 billion, a P/E ratio of 12.12, a P/E/G ratio of 2.81 and a beta of 0.69. The company has a current ratio of 1.08, a quick ratio of 1.08 and a debt-to-equity ratio of 7.38.

Analyst Upgrades and Downgrades

A number of equities research analysts recently issued reports on NMR shares. Nomura raised shares of Nomura to a "buy" rating and set a $10.20 price target on the stock in a research note on Thursday, June 25th. Weiss Ratings upgraded shares of Nomura from a "hold (c)" rating to a "hold (c+)" rating in a report on Friday, July 17th. Finally, Bank of America upgraded shares of Nomura from a "neutral" rating to a "buy" rating and set a $10.20 target price on the stock in a research report on Thursday, June 25th. One investment analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating and one has given a Hold rating to the company. According to data from MarketBeat.com, the stock has an average rating of "Buy" and an average target price of $10.20.

Institutional Inflows and Outflows

A number of hedge funds have recently bought and sold shares of NMR. Morgan Stanley grew its holdings in Nomura by 7.0% during the 4th quarter. Morgan Stanley now owns 9,815,360 shares of the financial services provider's stock valued at $82,351,000 after purchasing an additional 638,424 shares during the last quarter. Goldman Sachs Group Inc. boosted its holdings in Nomura by 3.5% during the 4th quarter. Goldman Sachs Group Inc. now owns 5,229,415 shares of the financial services provider's stock valued at $43,875,000 after acquiring an additional 175,201 shares during the period. Orion Porfolio Solutions LLC grew its position in Nomura by 4,944.8% in the 2nd quarter. Orion Porfolio Solutions LLC now owns 2,472,892 shares of the financial services provider's stock valued at $16,272,000 after acquiring an additional 2,423,873 shares during the last quarter. Millennium Management LLC increased its stake in Nomura by 55.4% in the fourth quarter. Millennium Management LLC now owns 1,451,595 shares of the financial services provider's stock worth $12,179,000 after purchasing an additional 517,250 shares during the period. Finally, Quantinno Capital Management LP increased its stake in Nomura by 49.8% in the second quarter. Quantinno Capital Management LP now owns 779,036 shares of the financial services provider's stock worth $5,126,000 after purchasing an additional 259,158 shares during the period. Institutional investors own 15.14% of the company's stock.

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.

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