Robust Automation Orders and Emerging Physical AI Tailwinds Underpin Buy Rating on Fanuc Despite FX-Driven Guidance Cut

Analyst Lisa Jiang from Morgan Stanley maintained a Buy rating on Fanuc Corporation and keeping the price target at Yen7,000.00.

Lisa Jiang has given his Buy rating due to a combination of factors that highlight Fanuc’s solid underlying momentum despite a modest earnings shortfall. Third-quarter operating profit grew strongly year-on-year, and while it came in slightly below forecasts largely because of currency-related unrealized profit effects, the more forward-looking order trends were notably robust. Total orders exceeded expectations, led by particularly strong demand in Factory Automation and Robots across key regions such as China, Japan, India, and the Americas, indicating that customer investment in automation is resuming. In addition, Fanuc is seeing early but meaningful traction in “physical AI” applications, with collaborative robot (CRX) orders already above 1,000 units and a visible pipeline of potential additional projects.

At the same time, the company’s slight reduction in full-year operating profit guidance is driven mainly by updated foreign-exchange assumptions rather than a deterioration in core business conditions, which Jiang likely views as a manageable and largely non-structural headwind. The geographic mix of orders—especially the pickup in U.S. demand from auto OEMs and parts suppliers, as well as emerging EV and IT-related projects in China—supports the view that capital expenditure in Fanuc’s end markets is normalizing after a period of restraint. Although the Robomachine segment remains weak, the strength and breadth of the automation and robotics businesses, combined with improving capex trends and growing AI-related opportunities, underpin Jiang’s conviction that earnings and orders can continue to recover. Taken together, these elements justify a positive stance on the stock and support her Buy recommendation on Fanuc.

According to TipRanks, Jiang is a 4-star analyst with an average return of 21.4% and a 71.43% success rate.

In another report released yesterday, TipRanks – OpenAI also reiterated a Buy rating on the stock with a Yen7,363.00 price target.