Preview: Further share price upside requires earnings growth drivers

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Preview: Further share price upside requires earnings growth drivers

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Kyocera (6971)

Preview: Further share price upside

requires earnings growth drivers

Reiterate Rating: UNDERPERFORM | PO: 2,600 JPY | Price: 3,796 JPY

Raise PO to ¥2,600, but reiterate Underperform 27 July 2026

In light of solid electronic component orders and improving margins in businesses Equity

including semiconductor-related, we raise our earnings forecasts for Kyocera as shown

in Exhibit 2. Accordingly, we raise our price objective (PO) from ¥2,200 to ¥2,600. The

Key ChangesPO is derived using a SOTP approach based on our FY3/28 EV/EBITDA assumptions

(Core Components: 14x, Electronic Components: 12x, Solutions: 9x). Previously, we used (¥) Previous Current

P/B of 1.0x as the basis for valuation, but we change our PO methodology following the Price Obj. 2,200 2,600

company's entry into an earnings recovery trend. 2027E Rev (m) 1,964,800 1,981,100

2028E Rev (m) 2,027,500 2,044,400

2029E Rev (m) 2,090,000 2,107,600Component demand growth expectation reflected in price

Our estimate for FY3/27 1Q operating profit (OP), to be announced on July 30, is 2027E EPS 87.81 88.72

¥31.2bn (+68% YoY). The Visible Alpha (VA) consensus is ¥30.3bn. We assume that 2028E EPS 93.91 93.88

improving profitability in MLCCs, tantalum capacitors, organic packages, and other 2029E EPS 102.23 102.35

businesses contributed to the substantial profit growth. We also estimate that increased 2027E EBITDA (m) 258,291 259,991

demand for fans used in air-conditioned clothing supported 1Q profit. However, Kyocera 2028E EBITDA (m) 290,362 294,144

shares also rose sharply from late May to early June on expectations for earnings growth 2029E EBITDA (m) 317,850 323,692

in passive components such as MLCCs.