Toto (5332.T): Maintaining Buy - demand remains strong, market to assess recovery of pushed - out sales

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Toto (5332.T): Maintaining Buy - demand remains strong, market to assess recovery of pushed - out sales

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03 Aug 2026 09:29:04 ET │ 14 pages

Toto (5332.T)

Maintaining Buy - demand remains strong, market to assess recovery of

pushed-out sales

CITI'S TAKE Buy

Price (03 Aug 26 15:30) ¥6,171.0 We make minor adjustments to our earnings forecasts following Q1

Target price ¥8,000.0 results. We raise our target price from ¥7,900 to ¥8,000 and maintain our

Buy rating, primarily as we upgrade our Japan housing equipment forecast Expected share price return 29.6%

as the impact from the Middle East situation has been milder than Expected dividend yield 1.9%

expected. Q1 fell short of consensus, however. We understand the biggest Expected total return 31.6%

concern, the revenue and profit decline in ceramics, was due to timing Market Cap ¥1,014,844M

delays due to supply constraints rather than demand declines. The US$6,440M

medium-term growth story likely remains unchanged. In Japan housing

equipment, Toto also announced price increases for December orders,

raising expectations for profit recovery from the coming fiscal year

onward. Catalysts include Q2 results offering confirmation of a delayed Masashi Miki, CFAAC

sales recovery and more on capital policies. +81-3-6776-4665

masashi.miki@citi.com

Ceramics business — Regarding the period-slippage delays, two types of supply

constraints have occurred: 1) for new equipment, Toto has been able to deliver

electrostatic chucks, but equipment manufacturers are experiencing shortages of

other components, causing equipment shipment to stagnate; 2) for replacements,

Toto has been experiencing difficulties in securing some components that go to

make up electrostatic chucks. The latter appears to have had the greater impact.