Attention Level ★★★★★ | Strong Earnings, Large-Cap Value Stocks, Large-Cap Growth Stocks, Investment Strategy During a Market Crash
November 7, 2026 | Japanese Stocks / Featured Stock Analysis
■ 1. Nikkei Average down 3,643 yen! Is a buying opportunity arriving for strong-performing stocks?
◇ In the Tokyo stock market on November 6, the Nikkei Stock Average fell sharply, down 3,643 yen from the previous day.
◇ Selling spread, centered on AI and semiconductor-related stocks, and large-cap stocks were also affected by widespread risk aversion.
◇ In such a situation, even companies that have announced strong earnings may see their stock prices fall.
◇ We would like to focus on two stocks this time.
・Nippon Steel (5401)
・Sony Group (6758)
◇ Both companies have revised their full-year earnings forecasts upward.
◇ However, the content of the upward revision and future growth potential are significantly different.
◇ In a crashing market, you want to check not just the rate of the stock price decline, but also how undervalued the stock has become relative to its corporate value.
■2. Nippon Steel (5401) | Final profit revised upward by 52%!
◇ Nippon Steel has significantly raised its full-year final profit forecast for the fiscal year ending March 2027.
◇ Comparison before and after the revision
・Previous forecast: 290 billion yen.
・Revised forecast: 440 billion yen.
・Upward revision amount: 150 billion yen.
・Upward revision rate: approximately 51.7%.
◇ Main factors for the upward revision
・Higher-than-expected performance of US Steel.
・Improvement in earnings from the raw materials business.
・Tax credits associated with capital investment in the United States.
◇ Looking at the numbers alone, the earnings are very strong.
◇ However, it is important to note that not all of the increase in net profit comes from sustainable core business earnings.
■3. Evaluating Nippon Steel’s profits by separating ‘core business’ and ‘tax credits’
◇ With this upward revision, the quality of earnings is important.
◇ Key figures
・Upward revision in net profit: 150 billion yen.
・Upward revision in business profit on a performance basis: 70 billion yen.
・Tax credits associated with capital investment: 96.1 billion yen.
◇ The 96.1 billion yen in tax credits is equivalent to approximately 64% of the 150 billion yen upward revision in net profit.
◇ However, this is a simple comparison between the tax credit amount and the upward revision amount, and not a precise breakdown of the profit increase.
◇ Meanwhile, business profit on a performance basis was also revised upward from 700 billion yen to 770 billion yen.
◇ The earnings forecast for US Steel’s core business has also been raised from 180 billion yen to over 230 billion yen.
◇ Nippon Steel’s profit increase is not just due to tax credits; improvements in its core business profitability are also progressing.
■4. Sony Group (6758) | Expecting record-breaking profits!
◇ Sony Group has also revised its full-year earnings forecast for the fiscal year ending March 2027 upward.
◇ Full-year company forecast
・Revenue: 13 trillion yen.
・Operating profit: 1.87 trillion yen.
・Net profit: 1.33 trillion yen.
◇ The previous operating profit forecast was 1.72 trillion yen.
◇ The upward revision amount is 150 billion yen.
◇ The net profit forecast has been raised from the previous 1.21 trillion yen to 1.33 trillion yen.
◇ Net profit is expected to increase by 29.0% compared to the previous fiscal year, reaching a new record high.
◇ Unlike Nippon Steel, the growth of businesses such as gaming, movies, and music is the primary factor for evaluation.
■5. Sony’s strength lies in profit growth across multiple businesses
◇ Sony’s main revenue sources
・Game & Network Services.
・Movies.
・Music.
・Image Sensors.
・Electronics-related businesses.
◇ In the gaming business in particular, software sales and network services are supporting revenue.
◇ The movie business has also seen improvements in profitability.
◇ The music business can expect continuous revenue from sources such as streaming.
◇ The image sensor business is also contributing to profits.
◇ However, there is a possibility that performance may fluctuate depending on the success of movies and the sales cycle of game consoles.
◇ I would like to evaluate Sony as a large-cap growth stock with multiple growth businesses.
■ 6. What is the difference between Nippon Steel and Sony?
◇ Nippon Steel (5401)
・Investment classification: Large-cap value stock.
・Core business: Steel.
・Profit growth factor: Earnings improvement at US Steel.
・Points to note: Tax credits, steel market conditions, and capital investment burden.
・Key indicators: Normalized P/E ratio, PBR, ROE, and financial soundness.
◇ Sony Group (6758)
・Investment classification: Large-cap growth stock.
・Core businesses: Games, movies, music, and semiconductors.
・Profit growth factors: Expansion of earnings in the entertainment business.
・Points to note: Pricing in growth expectations, exchange rates, and earnings fluctuations by business segment.
・Key indicators: EPS growth rate, operating profit margin, P/E ratio, and cash flow.
◇ Both companies have strong performance, but their stock valuation methods differ.
◇ Nippon Steel is undervalued when considering the economic cycle.
◇ Sony’s stock price level incorporates future profit growth.
◇ Investment decisions must be tailored to each company’s characteristics.
■7. Reasons why stock prices fall even with strong earnings
◇ Even companies that announce strong earnings can see their stock prices fall.
◇ Main reasons
・Market-wide risk aversion.
・The strong earnings were already priced in.
・The upward revision did not meet market expectations.
・Caution regarding a future slowdown in growth.
・Position adjustments by institutional investors.
◇ Stock prices move not only based on current performance but also on future profit growth and market expectations.
◇ Therefore, strong earnings and stock price increases do not always align.
◇ What is important is not whether the earnings were good, but how good the performance is relative to the current stock price.
■8. Five conditions for judging a buying opportunity during a market crash
◇ ① Earnings forecasts have been revised upward
・Is there sustainable profit growth, rather than just temporary gains?
◇ ② Operating profit margins are improving
・Is profit growing faster than revenue?
◇ ③ Sound cash flow
・Is operating cash flow in the black?
・Does cash remain after capital investment?
◇ ④ High financial soundness
・Level of interest-bearing debt.
・Degree of equity capital adequacy.
・Interest burden.
◇ ⑤ Stock price is becoming increasingly undervalued
・Forecast PER.
・PBR.
・ROE.
・EPS growth rate.
・Historical stock valuation levels.
◇ During a market crash, the divergence between corporate performance and stock prices can sometimes widen.
◇ However, a simple drop in stock price does not necessarily mean it is a buying opportunity.
■9. Three scenarios that will influence future stock prices
◇ Bullish scenario [Capital returns to strong-performing stocks]
・The Nikkei Stock Average stops falling.
・Selling pressure across the entire market weakens.
・Nippon Steel’s earnings from US Steel expand.
・Sony’s gaming and film businesses maintain strong performance.
・Buying back into high-performing large-cap stocks progresses.
◇ Neutral scenario [Selection based on performance and stock price continues]
・The index shows unstable price movements.
・Even among stocks with strong performance, differences in stock prices emerge based on P/E ratios.
・Nippon Steel’s development depends on assessing steel market conditions.
・Sony’s stock moves while incorporating profit growth.
◇ Bearish scenario [Prolonged market-wide decline]
・US stock prices continue to fall.
・Concerns about the global economy intensify.
・Steel demand slows down.
・Growth expectations for entertainment-related stocks are also revised.
・Selling continues even for stocks with strong earnings.
■10. Points to check in next week’s market
◇ Nippon Steel (5401)
・Earnings outlook for US Steel.
・Trends in steel market conditions.
・Profit based on actual performance excluding tax credits.
・Is the stock price undervalued relative to normalized earnings?
◇ Sony Group (6758)
・Growth of the gaming business.
・Profit margins in the film and music businesses.
・Trends in the image sensor business.
・Whether the stock price is at a level commensurate with EPS growth.
◇ Overall Market
・Stabilization of the Nikkei 225 and TOPIX.
・Rebound in US tech stocks.
・Capital inflows into high-performing large-cap stocks.
・Relative strength of sectors other than semiconductors.
■11. Summary: Confirm the corporate value of high-performing large-cap stocks during market crashes!
◇ Nippon Steel revises full-year net profit upward to 440 billion yen.
◇ The upward revision rate is approximately 51.7%.
◇ Earnings improvement at US Steel contributed to the results.
◇ However, this includes the impact of a 96.1 billion yen tax credit.
◇ Sony Group forecasts a full-year operating profit of 1.87 trillion yen.
◇ Net profit is expected to reach 1.33 trillion yen, setting a new record high.
◇ Nippon Steel should be evaluated as a large-cap value stock, and Sony as a large-cap growth stock.
◇ In a market crash, even stocks with strong performance may see their prices fall.
◇ However, it is dangerous to judge a stock as undervalued based solely on a price drop.
◇ Conclusion: Nippon Steel and Sony Group are notable large-cap stocks that have revised their full-year earnings upward. For Nippon Steel, focus on its core earnings power excluding tax credits; for Sony, focus on the sustainable profit growth of its entertainment business. During a market crash, rather than looking at the rate of decline, it is important to verify the gap between corporate value and the current stock price, and to determine the timing for purchase while maintaining cash reserves.
※This article is an analysis based on financial results and market trends as of November 2026. It does not recommend the purchase of any specific stock.
