Morgan Stanley has flagged three Japanese energy and utility companies that stood out after a wave of third-quarter earnings and guidance updates for the fiscal year ending March 2026. The investment bank examined share performance in the period from January 29 through February 16 and singled out one company each from the oil exploration, electric power and city gas segments.
The firm said its next priorities are any announcements about additional shareholder returns, the publication of fresh medium-term strategies, and the companies' initial guidance for the fiscal year to March 2027.
Japan Petroleum Exploration (JAPEX)
Japan Petroleum Exploration emerged as the top performer among the energy names tracked, with its shares rising 17.4% in the weeks following the company’s earnings release. Management raised its full-year net profit forecast, and Morgan Stanley attributed the upward revision chiefly to stronger operating profit from overseas exploration and production activities together with higher non-operating income. Those non-operating gains included increased foreign exchange profits. Despite the post-results share appreciation and guidance upgrade, Morgan Stanley retains an Equal-weight rating on the stock.
Chubu Electric Power
Among electric power companies, Chubu Electric Power was the standout, with a 17.0% share price increase over the same window. The market reacted favorably to progress reported on safety reviews at the Hamaoka Nuclear Power Station Units 3 and 4, including the establishment of a third-party committee to address the safety review concerns. Management kept fiscal 2026 guidance unchanged following the results. Morgan Stanley assigns Chubu Electric Power an Equal-weight rating.
Tokyo Gas
Tokyo Gas led the city gas group, gaining 10.7% since the start of the results season and recording nearly a 19% year-to-date advance. Company management raised its fiscal 2026 recurring profit guidance, citing growth in the Energy Solutions segment and its overseas business. Tokyo Gas benefited notably from higher shale gas sales prices in North America. Morgan Stanley continues to rate Tokyo Gas as Equal-weight.
Across the three companies, Morgan Stanley preserved Equal-weight ratings, indicating the bank regards these stocks as fairly valued relative to peers despite the recent share price moves and guidance changes. The bank’s attention now turns to whether companies will follow through with enlarged shareholder distributions, whether they will publish refreshed medium-term plans, and how they will frame prospects for the fiscal year beginning April 2026.