27/3 Q1 results update: We raise our growth forecasts

Research evidence excerpt

27/3 Q1 results update: We raise our growth forecasts

Global Markets Research

29 July 2026Keyence

6861.T 6861 JP / EQUITY: JAPAN INDUSTRIAL ELECTRONICS

Rating27/3 Q1 results update: We raise our growth

Remains Buyforecasts

Target price

Increased from 93,000 JPY 100,000Raising our outlook for Asia, the Americas, and Japan

Closing price JPY 70,950We reiterate our Buy rating, raise our forecasts, and forecast strong profit growth 28 July 2026

Keyence released 27/3 Q1 results after the close of trading on 28 July, posting operating

Implied upside +40.9%profits of ¥187.1bn (up 45% y-y), above our forecast of ¥153.0bn, on which basis our first

impression is slightly positive. This was mainly due to strong sales growth of 33%, beating

our forecast of 18%. Sales in Asia were much higher than we had expected, and sales in

Japan and the Americas were also higher than we had expected, on which basis we raise

Relative performance chartour sales forecasts for these regions and hike our earnings forecasts. We raise our 27/3

operating profit growth forecast from 14% to 27%. We retain our valuation base year and

fair-value P/E for our target price calculation, but raise our target price to reflect the

upward revision to our 29/3 EPS forecast.

Gross margin high, partly thanks to tariff refunds; we expect price revisions to feed

through to earnings in due course

The Apr–Jun gross margin was 85.0%, up sharply from 83.5% in the previous quarter and

82.6% in the same quarter a year earlier. At the results briefing held the same day,

management said the y-y improvement in the gross margin was evenly split between a

boost from "reciprocal" tariff refunds and a boost from yen depreciation. The impact of

"reciprocal" tariff refunds was around several billion yen in absolute terms, and we think