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Fanuc Corp 6954

Rating as of

Morningstar’s Analysis

Valuation
Currency in JPY
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Fanuc Faces Supply-Side Issues, but Actual Medium-Term Demand Prospects Seem Strong; Raising FVE

Jason Kondo Equity Analyst

Analyst Note

| Jason Kondo |

Wide-moat Fanuc’s results for fiscal 2021's first quarter, ended June 30, were stronger than we expected. We raise our fair value estimate to JPY 27,000 per share from JPY 25,000 after adjusting our fiscal 2021 revenue projection to reflect the latest results and revised expectations based on management’s guidance revision. Over the near term, we expect the two largest issues will be supply-side issues from parts procurement, which have already started to extend lead times between order and shipments, and uncertainty about the proportion of up-front purchases made by Fanuc’s customers (particularly for the robomachine and factory automation businesses), as orders have been at record levels. Despite these immediate hurdles, we think the latest results show that actual pent-up demand continues to lurk, and Fanuc will realize continued growth over the medium term. We think the shares are currently fairly valued as medium-term growth prospects are already likely priced in.

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Company Profile

Business Description

Fanuc Corporation provides factory automation products, such as industrial robots, computerized numerical control (CNC) systems, and compact machining centers (Robodrills) to mainly manufacturing companies globally. Fanuc had its beginnings as part of Fujitsu developing early numerical control (NC) systems, and now commands the top global market share with its CNC systems and industrial robots. Fanuc has approximately 260 service stations across the world and currently has more than 4 million CNC controls and 550,000 robots installed globally.

Contact
Oshino-mura
Yamanashi Prefecture, 401-0597, Japan
T +81 555845555
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings Jun 30, 2021
Fiscal Year End Mar 31, 2020
Stock Type
Employees 10,119