TDK (6762): Raise PO to ¥3,500 on battery strength and HDD parts expansion; Reiterate Buy

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TDK (6762): Raise PO to ¥3,500 on battery strength and HDD parts expansion; Reiterate Buy

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TDK (6762)

Raise PO to ¥3,500 on battery strength

and HDD parts expansion; Reiterate Buy

Reiterate Rating: BUY | PO: 3,500 JPY | Price: 2,978 JPY

PO ¥3,500, reiterate Buy 18 May 2026

Reflecting FY3/26 earnings results, we revise TDK’s earnings forecasts as shown in Equity

Exhibit 2. Accordingly, we raise our price objective (PO) from ¥2,800 to ¥3,500 (ADR PO

from $18.06 to $22.58). We reiterate Buy. The basis for our PO is a P/E of 25x our

Key ChangesFY3/28 EPS estimate. While we had applied 20x as the basis for our calculation, in light

of greater reassurance in fundamentals centered on the battery business and the (¥) Previous Current

potential for a valuation uplift as an AI-related company, we raise the applied multiple. Price Obj. 2,800 3,500

2027E Rev (m) 2,581,000 2,635,500

2028E Rev (m) 2,763,593 2,821,193Steady batteries and expansion in magnetic products

Our investment theses include (1) significant medium-term and long-term growth 2029E Rev (m) NA 2,994,593

potential in the mainstay battery business, (2) profitability improvement in the magnetic 2027E EPS 116.31 121.15

application products business, (3) stable growth in passive components, and (4) 2028E EPS 139.09 138.18

expectations for enhanced shareholder returns. In the battery business, in addition to 2029E EPS NA 155.44

maintaining high profitability in small batteries, we expect expansion of the mid-size 2027E EBITDA (m) 507,400 541,300

battery business for AI data centers, including BBU batteries. Magnetic application 2028E EBITDA (m) 576,300 605,000

products are also seeing demand growth in suspensions and magnetic heads, driven by 2029E EBITDA (m) NA 663,700

expanding data center demand.