BlockBeats report: On June 26, Citigroup raised its target price for Kioxia Holdings from JPY 73,000 to JPY 140,000 in a report released on June 25, maintaining a "Buy/High Risk" rating due to strong enterprise SSD demand, continued tight NAND supply and demand dynamics, and the potential for long-term supply agreements to enhance profit visibility.
Kioxia closed at ¥103,850 on June 25. According to Citi’s new price target, the stock still has approximately 35% upside potential. The report states that NAND market prices have risen since the fourth quarter of 2025, with demand from server and data center applications being “extremely strong,” and industry-wide supply shortages may persist until 2027.
Citibank’s profit forecast for Kioxia is highly aggressive. The bank expects the company’s first-quarter revenue for FY3/27 to reach JPY 1.82 trillion, an 81% quarter-over-quarter increase; operating profit is projected at JPY 1.40 trillion, with an operating margin of 77.1%. Revenue is forecast to rise further to JPY 2.43 trillion in the second quarter, with operating profit reaching JPY 1.98 trillion and the operating margin increasing to 81.5%.
For the full year, Citigroup expects Kioxia's revenue for FY3/27 to reach JPY 9.46 trillion, with an operating profit of JPY 7.68 trillion and an operating margin of approximately 81%. The bank also forecasts that Kioxia's operating margin will remain above 80% from FY3/27 through FY3/29.
Citibank believes that as Kioxia advances its long-term agreements, or LTAs, the cyclical volatility of the company’s profitability is expected to decrease. In the past, the market has applied a valuation discount due to high volatility in the NAND industry and the company’s concentrated business model; this discount may begin to narrow if the scope of long-term agreements expands.
However, Citigroup also emphasized that Kioxia is a "high-risk" stock. Risks include the potential improvement in China’s NAND supply if the U.S. relaxes export restrictions on semiconductor equipment to China; a potential rebalancing of supply and demand if industry capital expenditures accelerate; and possible disruptions to price increases due to inventory adjustments in smartphones or data centers. Additionally, a stronger yen would erode profits; Citigroup estimates that for every 1-yen appreciation of the yen, Kioxia’s operating profit declines by approximately ¥40 billion.