Sumitomo Mitsui Trust Holdings: Raising Fair Value to JPY 4,290 From JPY 3,420; ROE to Be Stable

We raised our fair value estimate for Sumitomo Mitsui Trust Holdings to JPY 4,290 from JPY 3,420 following revisions in our earnings forecast after the bank’s profit guidance surprised us positively. SMTH is guiding for a net profit of JPY 240 billion in the fiscal year ending March 2025, which is 11.7% above our original estimate. The bank is targeting to reach a return on equity of 8% in March 2026, close to our projected 7.6%. Our forecast assumes a slower loan growth than peers, given SMTH’s focus on expanding assets under management and more product-specific lending but stronger securities growth. We raise our original net profit forecast by 11% and 15% for its March 2025-26 fiscal years. Our March 2025 net profit of JPY 240 billion matches the bank’s guidance of JPY 240 billion. Our midterm forecast should also align with SMTH’s aspiration a net profit of over JPY 300 billion in fiscal 2030 (March 2031).