F3/27 1Q Results: Continues to Struggle in US Market

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M

Update

August 5, 2026 04:09 PM GMT

Morgan Stanley MUFG Securities Co., Ltd.+

SUBARU (7270) | Japan

Hiroto Segawa

Equity Analyst

F3/27 1Q Results: Continues to

Struggle in US Market

Shinji Kakiuchi

Equity Analyst

Hayato Takashima

Equity Analyst

AlphaSignals Earnings Reaction

Unchanged

Modest shortfall

Modest revision lower

Impact to our thesis

Financial results versus consensus

Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

SUBARU (7270.T, 7270 JP)

Key Takeaways

Slightly negative impression. Apr-Jun profit below expectations, partly due to US

Forester price cut, higher Outback incentives.

However, the share price already dropped following the results announcement

made during market hours, so room for additional downside appears limited.

Autos & Shared Mobility | Japan

Stock Rating

Industry View

Price target

Shr price, close (Aug 5, 2026)

Mkt cap, curr, basic (bn)

Avg daily trading value (bn)

Equal-weight

In-Line

¥2,500

¥2,476

¥1,772.0

¥11.3

SUBARU made no change to F3/27 OP guidance. We believe the key for achieving

guidance lies in improved sales quality in the US and the impact of higher

material costs.

SUBARU has decided to enter the auto finance business in North America by

2030. While this should expand value-chain earnings, it will also newly expose

SUBARU to credit risk.

Apr-Jun (1Q) results: Revenue was ¥1.2509trn (+3% YoY) and OP was ¥42.6bn. OP

missed consensus (¥60.7bn) by ¥18.0bn. Compared with our forecast, volume, mix,

and incentives impacts weighed on earnings. However, results were broadly in line

with Subaru's internal plan, and the company aims to improve sales momentum

through the introduction of a two-shift production system and mixed-model

production at its Yajima plant.

F3/27 plan: SUBARU maintained its OP guidance of ¥150bn. However, management

commented that the impact from raw material costs and market conditions (¥130bn) is increasingly likely to remain within the company's assumptions.

Entering the auto financing business: SUBARU announced its decision to launch

…