Why Did Nissan Chemical (TSE:4021) Move Today?

Nissan Chemical (TSE:4021) is back in focus after reporting first quarter 2026 earnings, with higher sales and net income than a year earlier, along with a board move on treasury shares.

See our latest analysis for Nissan Chemical.

The first quarter earnings and board decision on treasury shares sit against a strong run in Nissan Chemical's stock, with a 52.59% year to date share price return and 54.96% one year total shareholder return suggesting momentum has been building rather than fading.

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After a run that strong and fresh earnings from Nissan Chemical on the table, the key issue is whether the current price still offers an attractive balance between upside potential and downside risk. How does the valuation stack up now?

Preferred P/E of 20.7x: Is it justified?

Nissan Chemical currently trades on a P/E of 20.7x, which prices the stock above the broader JP Chemicals industry but below its own peer group average.

The P/E ratio compares the current share price with earnings per share. For a company like Nissan Chemical, with an earnings track record and forecast profit growth, it is a quick way for investors to see how much the market is paying for each unit of current earnings.

At 20.7x earnings, the market is valuing Nissan Chemical more richly than the JP Chemicals industry average of 12.4x. That suggests investors are willing to pay a premium to the sector for its earnings profile. However, the stock trades below the peer average P/E of 28.4x. This implies some investors may see room for the valuation to move closer to that peer level if the company continues to deliver on forecasts.

The fair P/E ratio estimate of 17.2x is lower than the current 20.7x. This is a clear signal that the present valuation is above the level the SWS fair ratio model suggests the market could move towards over time.

Explore the SWS fair ratio for Nissan Chemical

Result: Price-to-Earnings of 20.7x (OVERVALUED)

However, Nissan Chemical's premium P/E and strong 1 year share price return could face pressure if sector sentiment cools or if earnings trends fall short of expectations.

Find out about the key risks to this Nissan Chemical narrative.

Another view on Nissan Chemical using our DCF model

The P/E points to Nissan Chemical looking expensive, yet the SWS DCF model paints a very different picture. On that measure, the stock at ¥8,162 screens as undervalued against an estimated future cash flow value of ¥12,454.71. Which signal should carry more weight for you?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Nissan Chemical for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 26 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With mixed signals on valuation and sentiment around Nissan Chemical still positive, it may be useful to move quickly, review the data, and reach your own view using the 4 key rewards.

Looking for more investment ideas beyond Nissan Chemical?

If you want a broader view than just Nissan Chemical, use the Simply Wall St Screener to quickly spot other stocks that might fit your approach.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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