IT & Software: Investment Ideas for Late 2026–2027: Solid Demand but Sector Underperformance; Expect Share Price Recovery in Line With Profit Growth

Morgan Stanley MUFG Securities published an investment ideas report on Japan's IT & Software sector for late 2026-2027. The core view is that demand remains solid but the sector has underperformed, and share prices are expected to recover in line with profit growth. The report covers major Japanese IT services and software companies, including the Big 3 NRI, NEC and Fujitsu (all Overweight), mid-cap IT services names NS Solutions (Underweight), TIS (Equal-weight), Shift (Equal-weight), Oracle Japan (Equal-weight), OTSUKA (Overweight), Baycurrent (Equal-weight), BIPROGY (Equal-weight), and software names RAKUS, Money Forward, Appier, Sansan, freee, OBIC (all Equal-weight), Trend Micro (Underweight) and OBC (Overweight). It provides price targets, 2-year forward P/E and EV/EBITDA, and revenue and EPS growth forecasts, with analysis of catalysts including generative AI adoption, order intake and backlog accumulation, mid-term management plans and AI-driven productivity gains.