---
endpoint: analytics
pattern: Technology
status: done
latency_ms: 196130
conversation_id: e1abf841-c5ac-4e3a-88c9-bb2601044216
citations: 13
created: 2026-05-31 20:35:46Z
---

# Is CLSA incrementally more positive/negative on Hitachi. If so, why?

**Yes — CLSA has turned incrementally more positive on Hitachi (6501 JP).** Across 2025, the rating has been held at O-PF (Outperform), but the SOTP-based 12M target price was lifted from ¥4,600 (held from Jan through Apr 2025) to ¥5,000 at the 11-Jun-2025 "Digitalising assets" note — roughly a ~9% TP uplift implying +21% upside [1][6]. The analyst (Hideo Noda, CLSA Tokyo) has also consistently called Hitachi a top-pick in his IT-services/software coverage [10].

## Rating & Target Price Trajectory (CLSA)

| Date | Note title | Rating | TP (¥) | Implied upside |
|---|---|---|---|---|
| 20-Jan-2025 | Independent advantage [9][13] | O-PF | 4,600 | +24% |
| 31-Jan-2025 | Enviable progress [10] | O-PF | 4,600 | +17% |
| 26-Mar-2025 | New leadership [8] | O-PF | 4,600 | +21% |
| 28-Apr-2025 | Hitting higher target [7][11] | O-PF | 4,600 | +23% |
| **11-Jun-2025** | **Digitalising assets [1][4][6]** | **O-PF** | **5,000** | **+21%** |

The headline change: **TP ¥4,600 → ¥5,000 (+~9%)** between the April FY3/26 results note and the June IR Day note. Rating unchanged at O-PF, but the SOTP-derived equity value re-rated higher.

## Why CLSA Became More Positive

The incremental positive view is driven by **four structural arguments that crystallized at Hitachi's 11-June IR Day**, plus an improving cap-return story:

**1. Lumada/HMAX cross-segment expansion is now credible**
- CEO Toshiaki Tokunaga reiterated plans to roll out HMAX solutions — already successfully installed at Hitachi Rail — into the Energy and Connective Industries (CI) segments [1].
- CLSA highlights One Hitachi initiative leveraging unique sensor tech (M&A-acquired), Hitachi Digital and GlobalLogic for architecture/software [1].
- This is a step beyond the earlier "Lumada scaling" narrative — proving that the digital chassis travels across segments rather than being a DSS-only story.

**2. Service business at Hitachi Energy — major untapped upside**
- Current service ratio is **<1% across all contracts**; the new dedicated service unit at Hitachi Energy targets ~**25% service exposure** long-term, with M&A also being used to accelerate the build [2].
- This is the single largest delta vs. the prior thesis — converting a hardware-heavy power-grid business into a higher-margin, recurring-revenue service business. CLSA explicitly says it sees "a lot of upside potential" here [2].

**3. Portfolio sharpening + global M&A optionality**
- Management committed to further non-core divestitures; CLSA flags **storage and white goods** (Hitachi GLS) as likely candidates due to cyclicality and lower margins [3]. Earlier, the March note had already flagged a possible deconsolidation of Hitachi GLS within three years [8].
- Active global M&A pipeline in DSS and Energy, with ROIC/ROIC-spread discipline as the gating metric [3].

**4. Capital return — explicit and large**
- **¥300bn buyback announced for FY3/26**, partly funded by a ~¥130bn special gain from the sale of the Johnson Controls-Hitachi stake [11].
- CFO Tomomi Kato reiterated flexible buybacks plus a commitment to return **>50% of core FCF or net income** [4].

## What's NOT Driving the Upgrade (i.e., the Caveats)

- **Numbers themselves remain conservative.** Hitachi's FY3/26 guide bakes in ~¥30bn negative Trump-tariff impact, holding adjusted Ebita margin flat YoY at 11% [11]. The new medium-term plan targets (12%+ adj. Ebita margin for Hitachi Energy, 12-13% ROIC by FY3/28) were also described as "rather conservative" by CLSA [7].
- **The TP raise is SOTP-driven, not earnings-driven.** Comparing CLSA's April SOTP (TP ¥4,600, implied EV ¥21.4tn) [12] to the June framework suggests the uplift comes from higher segment multiples / valuation re-rating (particularly Hitachi Energy on the service-business optionality), not from upward earnings revisions. CLSA's own FY3/26 OP forecast of ¥1,077bn now sits at ~99% of consensus [5] — i.e., they are not above consensus on near-term earnings.
- **Short-term catalyst still pending**: clarity on tariff impact at 1QFY3/26 results [4].

## Multi-Year Context — The Rating History

Worth noting that the longer arc has actually been a small de-rating before this re-acceleration:
- **Mar 2024**: CLSA rated Hitachi **BUY** ("Connecting the dots")
- **Jul 2024 → present**: Downgraded to **O-PF**, held throughout
- **Jun 2025**: First TP uplift of the O-PF cycle (+¥400 to ¥5,000)

So the right framing is: CLSA is **incrementally more constructive within an O-PF stance** — not a re-upgrade to BUY. The signal is a TP hike + reaffirmed thesis on Lumada/HMAX optionality + Hitachi Energy service business + buybacks, against a backdrop where reported earnings forecasts remain in-line-to-modestly-below consensus.

## CLST vs CLSA-parent check

The analyst on every Hitachi note is **Hideo Noda (hideo.noda@clsa.com, +81 3 4578 8056)** — i.e., CLSA-Tokyo (parent), not CLST (Taiwan affiliate) [7]. So this is genuinely a CLSA-parent call, not CLST.

---
**Sources**
[1] Hitachi - O-PF (Digitalising assets) — CLSA (11 Jun 2025) — 607961791LinqAlpha.PDF
[2] Hitachi - O-PF (Digitalising assets) — CLSA (11 Jun 2025) — Hitachi Energy service-business upside
[3] Hitachi - O-PF (Digitalising assets) — CLSA (11 Jun 2025) — Non-core asset sales & M&A
[4] Hitachi - O-PF (Digitalising assets) — CLSA (11 Jun 2025) — Buybacks & ¥5,000 TP
[5] Hitachi - O-PF (Digitalising assets) — CLSA (11 Jun 2025) — FY26-28 financials table
[6] Hitachi - O-PF (Digitalising assets) — CLSA (11 Jun 2025) — Price target/upside summary
[7] Hitachi - O-PF (Hitting higher target) — CLSA (28 Apr 2025) — Analyst attribution + TP ¥4,600
[8] Hitachi - O-PF (New leadership) — CLSA (26 Mar 2025) — Reiterate O-PF / TP ¥4,600
[9] Hitachi - O-PF (Independent advantage) — CLSA (20 Jan 2025) — Reiterate O-PF / TP ¥4,600 / +24% upside
[10] Hitachi - O-PF (Enviable progress) — CLSA (31 Jan 2025) — Top-pick designation
[11] Hitachi - O-PF (Hitting higher target) — CLSA (28 Apr 2025) — FY3/26 guidance, Trump tariff, ¥300bn buyback
[12] Hitachi - O-PF (Hitting higher target) — CLSA (28 Apr 2025) — SOTP detail (TP ¥4,600)
[13] Hitachi - O-PF (Independent advantage) — CLSA (20 Jan 2025) — Board governance / transformation thesis

## Citations

- [1] **607961791LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961791LinqAlpha.PDF>
- [2] **607961791LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961791LinqAlpha.PDF>
- [3] **607961791LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961791LinqAlpha.PDF>
- [4] **607961791LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961791LinqAlpha.PDF>
- [5] **607961791LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961791LinqAlpha.PDF>
- [6] **607961791LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961791LinqAlpha.PDF>
- [7] **607957304LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607957304LinqAlpha.PDF>
- [8] **607954046LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/03/607954046LinqAlpha.PDF>
- [9] **607948552LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/01/607948552LinqAlpha.PDF>
- [10] **607949410LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/01/607949410LinqAlpha.PDF>
- [11] **607957304LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607957304LinqAlpha.PDF>
- [12] **607957304LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607957304LinqAlpha.PDF>
- [13] **607948552LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/01/607948552LinqAlpha.PDF>

