Forecast update: Expecting profit growth in semiconductor products, chemicals, life science

Research evidence excerpt

Global Markets Research

AGC

18 August 2026

5201.T 5201 JP / EQUITY: JAPAN GLASS, CEMENT & CERAMICS

Forecast update: Expecting profit growth in

semiconductor products, chemicals, life science

Rating

Remains

Company increasing production capacity for semiconductor-related

products; we expect life science segment to move into profit in 27/12

Reduced from JPY

We trim our forecasts but still expect growth over medium term, reiterate Buy rating

We trim our 26/12 operating profit forecast for AGC to reflect a decline in productivity in

the automotive glass business in North America, but still expect profits to carry on rising

over the medium term thanks to increased sales of semiconductor-related products and

margin improvements in the life science segment. We also trim our target price to ¥8,030,

which we still obtain using our 26/12 EPS forecast and a P/E of roughly 19x, in line with

the Russell/Nomura Large Cap (ex financials) average on 27/3 forecasts, white reiterating

our Buy rating.

We lower 26/12 operating profit forecast in view of deteriorating productivity in

automotive glass but still expect growth of 18% y-y

We lower our 26/12 operating profit forecast from ¥154.5bn to ¥150.1bn (up 18%/¥22.6bn

y-y), versus guidance of ¥150.0bn, primarily to reflect the deterioration in productivity in

the North American automotive glass business in Q2 and the prospect that this factor will

still affect earnings in Q3. We forecast operating profit growth of ¥7.1bn in the chemicals

segment on growth in fluorochemicals for the semiconductor industry and yen

depreciation, and growth of ¥16.3bn in the life science segment thanks to impairment

losses a year earlier and fixed cost savings. We forecast a ¥1.8bn decline in operating

profits in the electronics segment in view of deterioration in display glass margins because

of yen depreciation and weak demand for optical materials for smartphones, even though

sales of semiconductor-related products have been growing.

We forecast operating profit growth of 17% y-y for 27/12, expect growth in

semiconductor products, chemicals, and life science

We also trim our 27/12 operating profit forecast from ¥176.6bn to ¥175.8bn (up 17%/

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