J.P. Morgan: KIOXIA Holdings (285A.T) Investor Day - BiCS CBA Leadership Supports Higher Margins
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J.P. Morgan published a report following KIOXIA Holdings' (285A.T) Investor Day, maintaining an Overweight rating with a target price of 2,500 yen. The firm emphasizes that KIOXIA's leadership in BiCS CBA technology, combined with multi-year long-term agreements (LTAs), will support structurally higher profit margins and ensure long-term demand visibility.
The company laid out ambitious financial targets through fiscal year 2028. Management projects operating margins to expand from approximately 30% in fiscal 2026 to 35% in 2027, eventually reaching 40% in 2028. Gross margins are forecast to follow a similar upward trajectory, rising from 45% to 55% over the same period. To support this growth, capital expenditure is planned at roughly 300 billion yen for fiscal 2026, scaling up to 400 billion yen in 2027 and 500 billion yen in 2028.
Operationally, NAND bit shipment growth is expected to increase by 15% in fiscal 2026, 20% in 2027, and 25% in 2028. NAND pricing assumptions show a moderate 5% decline in 2026, remaining flat in 2027, and rising 5% in 2028. Consequently, free cash flow is projected to grow from 100 billion yen to 300 billion yen by fiscal 2028. This robust financial framework is expected to drive earnings per share from 200 yen to 300 yen, supporting growing dividend payouts.