3,900 Listed Companies in Japan. But How Many Get Analyst Coverage?

Japan’s stock market boasts 3,900 listed companies, but here’s a shocker: 70.5% of them have no analyst coverage. That’s 2,870 firms flying under the radar, including big names like 3591 Wacoal Holdings. Compared to the US, where only 60% lack coverage, Japan’s market is a blind spot for investors.

In this short blog, we’ll uncover why so many companies are ignored, what it means for you as an investor.

The Coverage Gap: 70.5% Ignored

As of December 2024, data from Nikkei Shimbun, QUICK Consensus, and LSEG showed 2,870 of Japan’s 3,900 listed companies—70.5%—lacked analyst target price forecasts, up 6% from five years prior. Even firms like 2928 RIZAP Group and 9601 Shochiku, with market caps over 100 billion yen, get no love. This gap makes it tough for investors to assess value without professional resources.

Big Firms Steal the Spotlight

Analysts focus heavily on Japan’s giants. The top 50 companies by market cap average 10.7 analysts each, with Toyota leading at 17. This bias toward large-cap stocks leaves smaller firms in the dust, widening the visibility gap and limiting investment in lesser-known companies.

Why Coverage Is Shrinking

Securities firms are scaling back. Deutsche Securities cut its Japan operations in 2019, followed by Credit Suisse in 2022, dropping firms like 2484 Demae-can. Nana Otsuki from Pictet Japan notes, “Japan has fewer independent research firms than the US, with coverage concentrated on big players doing deals with big securities firms.” Domestic firms can’t fill the gap, leaving mid-sized companies overlooked.

Smaller Firms’ Growth Struggles

Smaller companies often lack the growth to attract analysts. A 2024 Tokyo Stock Exchange survey found 45% of growth-listed firms had lower market caps than at their IPO. Stagnant performance makes these stocks less appealing, creating a cycle of neglect that’s hard to break.

End Note

Japan’s 3,900 listed companies hide a stark truth: 70.5% lack analyst coverage with price targets, driven by a focus on big firms and shrinking research. But this gap is your opportunity to uncover promising stocks. Which hidden stock will you explore next?