Toho Zinc price target (TYO:5707) reduced by 34.62% to 1,734.00

The one-year average price target for Toho Zinc has been brutally cut to 1,734.00 yen per share. This reduction of 34.62% from the previous estimate of 2,652.00 on May 10 seems like a devastating blow to current investors.

Analysts have set targets ranging from a minimum of 1,717.00 to a maximum of 1,785.00 per share. Although the average target represents an increase of 4.65% from the last closing price of 1,657.00, this small potential increase hardly offsets the drastic downward revision.

The only thing that could keep the interest of some investors is the dividend yield of 4.50%. However, I am seriously concerned that the company has a dividend payout ratio of 1.28. This means that Toho Zinc is paying out more in dividends than it earns, resorting to its reserves to maintain these payments - a clearly unsustainable situation in the long term.

Regarding institutional sentiment, 37 funds report positions in Toho Zinc, representing a decrease of one owner (2.63%) compared to the previous quarter. The average weight in portfolios dedicated to this stock is only 0.02%, with a reduction of 10.15%.

Although total shares in institutional hands increased by 5.27% to 1.02 million, the movements of the main funds are revealing: while VGTSX (Vanguard) increased its stake by 9.90%, DISV (Dimensional) drastically reduced its portfolio allocation by 26.32% despite increasing the number of shares.

Personally, I see these signals as a clear warning. With such a severely cut price target and an unsustainable dividend, investors should carefully consider their exposure to Toho Zinc at this time.