F3/27 1Q Results: Expect Further Earnings Growth in 2Q

First-page research excerpt

Not for redistribution without written consent of Morgan Stanley

M

Update

July 31, 2026 04:54 PM GMT

Morgan Stanley MUFG Securities Co., Ltd.+

TDK (6762) | Japan

Shoji Sato

Equity Analyst

F3/27 1Q Results: Expect

Further Earnings Growth in 2Q

Sota Harashima

Equity Analyst

AlphaSignals Earnings Reaction

Strengthens our thesis

Meaningful upside

Modest revision higher

Impact to our thesis

Financial results versus consensus

Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

Key Takeaways

All segments, not confined to Energy where the main product is rechargeable

batteries, recorded strong profit growth both YoY and QoQ.

TDK (6762.T, 6762 JT)

Electronic Components | Japan

Stock Rating

Industry View

Price target

Shr price, close (Jul 31, 2026)

Mkt cap, curr, basic (bn)

Avg daily trading value (bn)

Overweight

In-Line

¥4,900

¥3,008

¥5,709.6

¥29.4

Besides rechargeable batteries and magnetic sensors for N. American

smartphones, sales look set to increase in HDD heads and suspensions too from

2Q.

We expect earnings contributions from F3/27 from LFP-cell rechargeable

batteries and high-current thin-film inductors for AI/DCs.

1Q results: OP of ¥86.3bn (our forecast: ¥64.5bn, FactSet consensus: ¥66.3bn)

increased by ¥29.9bn YoY and ¥44.6bn QoQ. All 4 segments, not only Energy where

the main product is rechargeable batteries, recorded strong rises in profit both YoY

and QoQ. Sales of passive components increased for AI/data centers and automotive

uses.

F3/27 company forecasts: TDK continues to target full-year OP of ¥295.0bn (our

forecast: ¥335.8bn, FS: ¥317.0bn). We see considerable scope for it to overshoot,

given growth in sales of high-earning products such as rechargeable batteries and

magnetic sensors for N. American smartphones in 2Q and 3Q, and a high probability

of continuing growth in sales of HDD heads and suspensions in and after 2Q as well.

Our view: We envisage structurally-balanced earnings on rising income from

rechargeable batteries as well as better earnings from passive parts, sensors and

relating to HDDs. We foresee contributions to earnings from F3/28 from products

…