Jefferies names the top pick in the Japanese precision equipment sector

2026-04-08 07:23:42

Investing.com – Jefferies (Jefferies) has announced its preferred stocks in Japan’s precision equipment sector. The company believes the stocks could see significant upside after the stock price fell following its third-quarter earnings release.

The investment bank emphasized that favorable conditions in the memory market and expectations of a strong capital investment trend are the key drivers for the sector.

**1. KOKUSAI - ** Jefferies recommends KOKUSAI for upside potential based on current share price levels. The company noted that the stock has fallen relatively after the third-quarter earnings release.

Excluding uncertainty in the broader environment, Jefferies expects favorable memory-related news, including strong memory demand, continued tightness in supply and demand conditions, strong DRAM capital investment, and an acceleration of NAND investment from the second half of 2026 through 2027.

The company believes there is relatively ample room for the share price to rebound.

**2. Tokyo Seimitsu - ** Jefferies expects that fiscal year ending March 2027 earnings will benefit from growth in HBM and CoWoS probe stations, as well as a recovery in general memory.

Based on relative valuation, the company sees significant upside potential. While guidance may be slightly below market consensus expectations is a concern, Jefferies believes growth in fiscal year ending March 2027 and over the medium term should remain sustained.

The company believes the share price could rise before the end of 2026.

**3. TOWA - ** Jefferies expects fiscal year ending March 2027 earnings will benefit from growth in HBM compression equipment and a recovery in general memory.

Based on relative valuation, the company sees significant upside potential. Similar to Tokyo Seimitsu, while guidance may be below market consensus remains a concern, Jefferies expects growth in fiscal year ending March 2027 and over the medium term to continue.

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