Renesas Electronics (6723.T): Q2 results positive - strong outlook for data center and industrial sectors

Research evidence excerpt

Renesas Electronics (6723.T): Q2 results positive - strong outlook for data center and industrial sectors

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31 Jul 2026 11:31:19 ET │ 10 pages

Renesas Electronics (6723.T)

Q2 results positive - strong outlook for data center and industrial

sectors

CITI'S TAKE Neutral

Price (31 Jul 26 15:30) ¥3,442.0 Q2 non-GAAP OP reached ¥132.7bn, beating VA consensus of ¥125.4bn by

Target price ¥5,200.0 6%. Both automotive and IIoT revenues exceeded expectations, while

SG&A expenses came in lower than anticipated. Q3 guidance calls for Expected share price return 51.1%

non-GAAP revenue of ¥430bn and Non-GAAP operating profit of ¥140bn, Expected dividend yield 1.0%

exceeding VA consensus of ¥418.4bn and ¥132.7bn. By segment, Expected total return 52.1%

automotive is expected to continue its moderate recovery, with low Market Cap ¥6,244,802M

single-digit QoQ growth, while infrastructure and industrial plans call for US$39,144M

double-digit QoQ revenue growth, with data center-related demand

ultimately serving as the driver. Management indicated that the impact

from the Kumamoto earthquake would likely remain minor.

Takero FujiwaraAC

Implications — Our impression is positive; we appreciate the stronger-than- +81-3-6776-4642

consensus earnings outlook despite Renesas’ tendency toward conservative takero.fujiwara@citi.com

guidance. However, upside centers on growth areas that have attracted attention

recently, while automotive and IoT are generating only moderate growth. On pricing

strategy, the company is sticking to its familiar stance of implementing price

increases to absorb cost increases while remaining reluctant to pursue aggressive

price increases for margin improvement. While we expect consensus to rise, we do