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Nissan Chemical (TSE:4021) is back in focus after its August 7 earnings update for the quarter to June 30, 2026, along with a board decision on treasury share disposal for a performance linked stock compensation plan.
See our latest analysis for Nissan Chemical.
The strong first quarter figures and board decision on performance linked stock compensation have come against a backdrop of robust momentum, with Nissan Chemical's 1 year total shareholder return of 53.55% and year to date share price return of 46.51% standing out despite a softer 30 day share price return of 3.25%.
If Nissan Chemical's recent move has you thinking about where else growth stories might be taking shape, this is a good moment to scan 10 top founder-led companies
The share price has already put a lot of Nissan Chemical's recent progress into focus after the August move. The next step is to assess whether the current valuation still leaves meaningful upside, or whether it has already captured most of that progress.
Price-to-Earnings of 19.9x: Is it justified?
The clearest starting point for Nissan Chemical's current valuation is its P/E of 19.9x, which sits against a last close of ¥7,837 and a 1 year total shareholder return of 53.55%.
The P/E ratio compares the current share price to earnings per share and is a quick way to see how much investors are paying for each unit of profit. For a business like Nissan Chemical, with exposure to chemicals, performance materials, agricultural chemicals and healthcare, earnings are a key lens because they condense many moving parts of the business into a single figure.
Two messages come through from the data. First, Nissan Chemical is described as good value when compared to the peer average, with a P/E of 19.9x versus 28.7x. That suggests the market price is not especially stretched relative to similar companies. Second, the same P/E of 19.9x is described as expensive against an estimated fair P/E of 16.7x, and also expensive versus the broader JP Chemicals industry average of 12.7x. Those comparisons point to a market valuation that already prices the stock above both its fair ratio estimate and the sector average level that prices often move towards over time.
Explore the SWS fair ratio for Nissan Chemical
Result: Price-to-Earnings of 19.9x (OVERVALUED).
However, you also need to weigh risks, such as any change in demand across Nissan Chemical's end markets and execution challenges across its diverse business segments.
Find out about the key risks to this Nissan Chemical narrative.
Another View on Nissan Chemical's Valuation
The P/E discussion presents Nissan Chemical as expensive relative to its fair ratio and the JP Chemicals industry. The SWS DCF model, however, points in the other direction. At a share price of ¥7,837, the stock is described as trading below an estimated future cash flow value of ¥11,847.67.
This suggests the current price is at a discount to what the DCF model indicates as reasonable. That creates a very different narrative compared with the P/E-based view. The key question is which lens investors place more weight on for a business with earnings that have grown 4.7% per year over five years.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day ( check out Nissan Chemical for example ). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 19 high quality undervalued stocks . If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
If this mix of signals on Nissan Chemical leaves you unsure, take a closer look at the details and move quickly to shape your own view. To see what the current optimism is based on, review the 4 key rewards
Looking for more investment ideas beyond Nissan Chemical?
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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.
Companies discussed in this article include 4021.T .
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