Fujitsu: Risk Reward Update

Research evidence excerpt

Fujitsu: Risk Reward Update

UpdateM

RiskRisk RewardReward– Fujitsu- (6702.T)Fujitsu (6702.T)

Industry-leading IT solution delivery capability

PRICE TARGET ¥4,000 OVERWEIGHT THESIS

For the IT services industry, we use EV/EBITDA. This approach allows us to reflect the level ▪Industry-leading IT solution delivery

of net debt on the balance sheet in our equity value assessment. For Fujitsu, we apply top capability

quartile of industry target multiples, based on the rationale that the company has industry- ▪Growth potential of UVANCE

leading IT solution delivery capability, its growth potential of UVANCE, and problem solving ▪Problem solving capability in

capability in modernization area. Our price target EV/EBITDA multiple is 12x. modernization area

¥4,704

Consensus Price Target Distribution ¥3,960.00 ¥6,000.00 Consensus Rating Distribution

MS PT

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates 76% Overweight

24% Equal-weight

0% Underweight

RISK REWARD CHART MS Rating

Source: Refinitiv, Morgan Stanley Research

JPY ¥5,500¥5,500(+70.23%)¥5,500(+70.23%)(+70.23%)

Risk Reward Themes

4800 Secular Growth: Positive

Self-help: Positive

¥4,000¥4,000(+23.80%)¥4,000(+23.80%)(+23.80%) View descriptions of Risk Rewards Themes here

¥3,231¥3,231¥3,231

¥2,500¥2,500(-22.62%)¥2,500(-22.62%)(-22.62%)

MAY '25 NOV '25 MAY '26 MAY '27

Key: Historical Stock Performance Current Stock Price Price Target

BULL CASE ¥5,500 BASE CASE ¥4,000 BEAR CASE ¥2,500

Implied EV/EBITDA (2 yr fwd): 17x EV/EBITDA (2 yr fwd): 12x Implied EV/EBITDA (2 yr fwd): 8x

Bull case assumes steady growth in For the IT services industry, we use Bear case assumes weaker revenues and

revenues and adjusted OP margin from EV/EBITDA. This approach allows us to adjusted OP margin from Regions (Japan)