Tsubaki Nakashima suffers a 20% reduction in its target price to 1,020.00

The average price target for Tsubaki Nakashima (TYO:6464) has been revised down to 1,020.00 yen per share. This revision represents a significant fall of 20% compared to the previous estimate of 1,275.00 yen from May 10, 2023.

Looking at the details, the most recent targets range from a minimum of 1,010.00 to a maximum of 1,050.00 yen per share. The average target price represents a 23.64% increase from the last reported closing price of 825.00 yen. Frankly, it seems to me to be an exaggerated optimism considering the current downward trend.

Despite this outlook, Tsubaki Nakashima maintains a dividend yield of 3.64%, although its payout ratio is concerning: -0.13. This indicates that the company is paying out more in dividends than it generates, a clearly unsustainable situation in the long term. Its 3-year dividend growth rate is negative (-0.52%), reflecting a troubling trend.

The institutional sentiment is not encouraging either. Only 33 funds or institutions report positions in Tsubaki Nakashima, which represents a decrease of 2.94% compared to the previous quarter. The average portfolio weighting dedicated to this stock is only 0.02%, having decreased by 24.24%. Although the total number of shares in institutional hands increased slightly by 2.80% to 2.879 million, several major funds have reduced their positions.

Among the main shareholders, Vanguard Total International Stock Index Fund holds 554,000 shares unchanged, while DFA International Small Cap Value Portfolio has increased its stake by 3.93%, although it reduced its portfolio allocation by 6.62%. Vanguard Developed Markets Index Fund and DFA International Core Equity Portfolio have decreased both their holdings and their allocations.

With this outlook, is it really worth betting on a company whose target price has been cut so drastically? The numbers don't lie, and the direction seems clear.