SMC: F3/26 4Q Results: Semi-related Demand Recovering Strongly, But Shareholder Returns and Profit Guidance Below Market Expectations, Leaving Negative Impression

Research evidence excerpt

SMC: F3/26 4Q Results: Semi-related Demand Recovering Strongly, But Shareholder Returns and Profit Guidance Below Market Expectations, Leaving Negative Impression

Update

May 14, 2026 11:17 AM GMT

Morgan Stanley Asia Limited+MSMC (6273) | Japan Lisa Jiang

Equity Analyst

F3/26 4Q Results: Semi-related Lisa.Jiang1@morganstanley.comMorgan Stanley MUFG Securities Co., Ltd.+ +852 2239-1282

Daisuke Horiuchi

Research AssociateDemand Recovering Strongly, Daisuke.Horiuchi@morganstanleymufg.com +81 3 6836-5428

SMC (6273.T, 6273 JT)But Shareholder Returns and

Factory Automation | Japan

Stock Rating Equal-weightProfit Guidance Below Market Industry View Attractive

Price target ¥65,000

Shr price, close (May 14, 2026) ¥79,470Expectations, Leaving Negative Mkt cap, curr, basic (bn) ¥5,064.9

Avg daily trading value (bn) ¥18.7

Impression

Reaction to earnings

Unchanged In-line Modest revision lower

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

Key Takeaways

4Q orders rose +24% QoQ, led by semiconductor-related. Apr orders recovered

further, with semiconductor/electrical equipment & Greater China expanding

strongly.

Guidance for the new fiscal year is likely short of market expectations.

Announced a share buyback capped at ¥50bn, 1.3% of shares outstanding, to run

through Mar 24, 2027.

As part of efforts to lift ROE to 10% or higher, a buyback was highly anticipated,

but the ¥50bn buyback size falls well short of market expectations.

Following intraday results, the share price fell 5-6%. We expect substantial

revenue growth, but margin improvement will not be easy; caution is warranted.

4Q results: 4Q OP was ¥53.0bn, up 12% YoY. It significantly exceeded the company