Bullish on tight supply/demand dynamics benefiting large gas turbines; monitoring product mix trends in aero engines; reiterate Buy on MHI

Research evidence excerpt

Bullish on tight supply/demand dynamics benefiting large gas turbines; monitoring product mix trends in aero engines; reiterate Buy on MHI

Equity Research

23 June 2026 | 9:43PM JST

JAPAN AEROSPACE & DEFENSE

Bullish on tight supply/demand dynamics benefiting large gas turbines;

monitoring product mix trends in aero engines; reiterate Buy on MHI

Share price performance in the Japan Aerospace & Defense sector has been soft Yuichiro Isayama

+81(3)4587-9806 |

since March. Meanwhile, we believe the fundamental outlook for each company yuichiro.isayama@gs.com

Goldman Sachs Japan Co., Ltd.

remains solid. The main factors behind the share price correction are valuation

Takato Enokiadjustments for global aerospace & defense stocks and a relative preference within +81(3)4587-1739 |

the Japan Industrials sector for stocks benefiting from AI capex. takato.enoki@gs.comGoldman Sachs Japan Co., Ltd.

Chie HuAgainst this backdrop, we continue to favor stocks with a high likelihood of achieving +81(3)4587-6330 | chie.hu@gs.com

above-sector-average earnings growth and above-consensus earnings growth, and Goldman Sachs Japan Co., Ltd.

we will re-examine the fundamental trends for each company. In this report, we

update our earnings forecasts for the three heavy industry stocks. While we broadly

maintain our full-year earnings forecasts for FY3/27 and beyond, we disclose our

quarterly forecasts for FY3/27. For Buy-rated Mitsubishi Heavy Industries, our

business profit forecasts for the Energy Systems segment from FY3/28 to FY3/30 are

on average 10% above Bloomberg consensus. This reflects our view that, in addition

to the continued benefits from tight global gas turbine supply/demand, revenue

recognition of projects with favorable order-time profitability will proceed at a faster