Keyence

Research evidence excerpt

Keyence

Global Markets Research

26 June 2026Keyence

6861.T 6861 JP / EQUITY: JAPAN INDUSTRIAL ELECTRONICS

RatingWe forecast faster growth during upcycle Remains Buy

Target price JPY 93,000 RemainsWe like the phased changes in management and disclosures

Closing price JPY 77,370We reiterate our Buy rating; our assessment of current situation based on AGM and 25 June 2026

recent demand environment

On 12 June, the company held a general shareholders' meeting and also released its 26/3 Implied upside +20.2%

annual securities report. A proposal to add provisions about share buybacks in the articles

of incorporation to allow for flexible capital policy was approved at the AGM, and the

company can now carry out share buybacks by resolution of the board of directors. Our

forecasts assume share buybacks of ¥200.0bn, although we have factored this in for 28/3, Relative performance chart

not 27/3. We forecast operating profit growth of 18% for Apr–Jun 2026, which would

represent continued high growth following on from 17% growth in Jan–Mar. We retain our

earnings forecasts and target price and reiterate our Buy rating.

High level of profit growth on strong cyclical recovery as well as company-specific

growth factors

Sales growth at the company is affected by moves to tap demand by identifying latent

needs at customers as well as company-specific factors such as increases in marketing

headcount and faster overseas expansion, but it is also affected by capex at customers in

the manufacturing sector. The Japan Machine Tool Builders' Association (JMTBA)

published confirmed order data on 25 June, showing that orders remained high in China,

driving y-y growth overseas, while orders in Japan also rose at a faster pace than in the

previous year.