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

Target price

¥5,200.0

Expected share price return

51.1%

Expected dividend yield

1.0%

Expected total return

52.1%

Market Cap

¥6,244,802M

US$39,144M

Q2 non-GAAP OP reached ¥132.7bn, beating VA consensus of ¥125.4bn by

6%. Both automotive and IIoT revenues exceeded expectations, while

SG&A expenses came in lower than anticipated. Q3 guidance calls for

non-GAAP revenue of ¥430bn and Non-GAAP operating profit of ¥140bn,

exceeding VA consensus of ¥418.4bn and ¥132.7bn. By segment,

automotive is expected to continue its moderate recovery, with low

single-digit QoQ growth, while infrastructure and industrial plans call for

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-thanconsensus earnings outlook despite Renesas’ tendency toward conservative

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

not anticipate the share price appreciation resulting from the elimination of discount

versus peers that we saw in the first half of the year.

Consol.

12/24A

Sales

OP

Pretax Profit

NP

EPS

PE

¥M

YOY (%)

¥M

YOY (%)

OPM(%)

¥M

YOY (%)

¥M

YOY (%)

X

1,348,479

-8.2

397,912

-20.7

29.5

263,833

-37.5

219,095

-35.0

202

17.1

12/25A

1,321,212

-2.0

386,872

-2.8

29.3

-30,275

nm

-51,780

nm

180

19.1

12/26E

1,612,000

22.0

514,000

32.9

31.9 606,000

na

456,000

nm

217

15.9

12/27E

1,745,000

8.3

563,000

9.5

32.3

422,000

-30.4

316,000

-30.7

232

14.8

12/28E

1,926,000

10.4

645,000

14.6

33.5 509,000

20.6

382,000

20.9

265

13.0

…