Daifuku: Improved Profitability but Limited Upside Keeps Rating at Hold

Analyst Lisa Jiang of Morgan Stanley maintained a Hold rating on Daifuku Co, with a price target of Yen5,000.00.

Lisa Jiang has given his Hold rating due to a combination of factors tied to Daifuku’s earnings outlook and valuation. He acknowledges notable improvements in profitability and has raised operating profit forecasts for the next two fiscal years, supported by solid demand in semiconductor-related and clean room businesses. At the same time, he sees that guidance is likely to remain conservative, with only modest profit growth expected and management margin assumptions that are still less optimistic than the broader market’s expectations. He also notes potential downside risk relative to consensus, as both profit and order guidance could end up below what investors are currently pricing in.
Despite lifting the price target to ¥5,000 and slightly increasing the valuation multiple to reflect stronger profitability and heightened interest in semiconductor-related orders, the current share price already exceeds this target, implying limited further upside. He expects order growth to be steady but not explosive, with some segments such as automotive poised for a rebound but others, like airport-related projects, normalizing after prior large contracts. Overall, he anticipates earnings to remain at a high and stable level but does not see a strong catalyst for substantial additional share price appreciation from here, which underpins his decision to maintain a Hold stance on the stock.

According to TipRanks, Jiang is a 4-star analyst with an average return of 21.4% and a 71.43% success rate. Jiang covers the Industrials sector, focusing on stocks such as Ebara, Fanuc Corporation, and Daifuku Co.