The market has already cooled on Nomura Holdings. The stock is roughly flat over the past week and down over the last three months, even after the latest numbers hit the tape.
Q2 2027 earnings landed with group net revenue of ¥607.5b and net income of ¥103.7b, giving basic earnings per share of ¥35.50. The real story sits on the income statement. Profitability is under quiet pressure, with recent net profit margins running below last year and return on equity in Q2 at 10.9%, compared with 13.3% for the first half.
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Q2 2027 Earnings Summary
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Group Revenue (Q2 2027 vs Q2 2026):¥607,476m vs. ¥515,462m (higher period on period)
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Net Income, excl. extra items (Q2 2027 vs Q2 2026):¥103,728m vs. ¥92,078m (higher period on period)
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Basic EPS (Q2 2027 vs Q2 2026):¥35.501 vs. ¥31.330 (higher period on period)
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Return on Equity, ROE (Q2 2027 vs H1 2027):10.9% vs. 13.3% (lower in the quarter than the half year average)
Earnings only tell part of the story, since cash flow is what many valuation focused investors ultimately anchor on when deciding what they are willing to pay. Looking at Nomura Holdings' cash flows alone, the stock could be a dramatic 41% undervalued .
Nomura Bull Case: Fee Mix Ambition On Trial
"Bullish analysts expect Nomura Holdings to keep shifting its earnings mix toward more stable fee and interest income as Wealth Management, Investment Management, Wholesale, Banking and cost reform programs progress against raised 2030 and FY31 targets."
Nomura Holdings is moving in the right direction on this claim, but progress is uneven. Wealth Management and Investment Management are both posting record recurring revenue and solid net inflows, which backs the story of steadier fee income. Banking is small in yen terms yet delivered higher quarterly pretax profit, helped by Deposit Sweep and trust fees. Wholesale still drags on that vision, with a high expense ratio and profit falling sharply after a strong Q1.
Nomura Bear Case: Funding And Market Shocks Risk Test
"Nomura Holdings still relies heavily on wholesale funding rather than a large base of customer deposits. Sharp moves in the yen or stress in funding markets could raise funding costs faster than the company can reprice assets, which would pressure net margins and limit earnings."
This concern remains credible, although the latest numbers do not show clear damage yet. Group ROE of 13.3% for H1 and 10.9% in Q2 indicates earnings power held up despite what management labels volatile markets and geopolitical risk. Banking revenue and pretax income both improved, which helps diversify away from pure wholesale swings. Even so, the reliance on market funding means any future yen spike or liquidity squeeze could quickly test these margins, especially with Wholesale profitability already under pressure.
One Narrative has put a figure on that disagreement. → See the Narrative with its higher Fair Value, assumptions and all .
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Nomura Holdings just reported solid earnings even as its share price cooled. The real opportunity is finding stocks that could be undervalued before the market fully recognises their potential.
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Company 1 - 40% below our estimate - sells low code workflow tools companies adopt when scattered spreadsheets start breaking everyday operations.
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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 8604.T .
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