Mitsubishi Electric (6503.T): Q1 positive - beat and raise, but FY3/27 guidance still looks cautious

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31 Jul 2026 09:00:44 ET │ 10 pages

Mitsubishi Electric (6503.T)

Q1 positive - beat and raise, but FY3/27 guidance still looks cautious

CITI'S TAKE

Buy

Price (31 Jul 26 15:30)

¥5,912.0

Target price

¥7,600.0

Expected share price return

28.6%

Expected dividend yield

1.0%

Expected total return

29.6%

Market Cap

¥12,098,528M

US$75,836M

April-June OP was ¥139.5bn, beating VA consensus of ¥126.2bn by c10%.

By business, we believe the FA, air conditioning & home appliances, and

semiconductor businesses outperformed. FA orders grew strongly by 42%

YoY/11% QoQ, continuing the strong growth from January-March's +30%

YoY. Full-year adjusted OP guidance was raised from ¥590bn to ¥620bn

(equivalent to ¥630bn on an OP basis vs VA consensus of ¥629.8bn). The

company reflected the beat versus internal plan in April-June, while

keeping projections for July-September onward largely unchanged. In

particular, FA's projected revenue growth from July-September remains at

+8% YoY, which we view as conservative relative to the order growth rate.

The forex assumption from July-September also factors in yen

appreciation, and if current rates continue, this represents c¥30bn of

profit upside. Earthquake impact was described as minor.

Masahiro ShibanoAC

Implications — We see the results as positive and believe consensus will continue to

trend upward, driven by FA strength. Similar to other FA companies, expanding

demand for semiconductor manufacturing equipment will likely be the growth

driver. We think expectations for further full-year guidance upgrades will build

toward July-September results. The company stated there is no change to its

shareholder return policy, and we believe the possibility of a buyback announcement

will be considered toward H1 results. The continuation of negotiations regarding

establishing an automotive equipment business JV with Hon Hai, without a final

agreement announcement this time, was somewhat disappointing.

Consol.

Sales

OP

Pretax Profit

NP

EPS

PE

¥M

YOY (%)

¥M

YOY (%)

OPM(%)

¥M

YOY (%)

¥M

YOY (%)

X

5,521,711

5.0

391,850

19.3

7.1

437,265

19.5

324,084

13.7

156

38.0

3/26A

5,894,747

6.8

433,095

10.5

7.3

526,077

20.3

407,758

25.8

198

29.8

3/27CE

…