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Renesas Electronics
(6723)
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Rating:67Neutral
Price Target:
¥4,237.00
▲(7.87% Upside)
Action:Reiterated
Date:08/04/26
The score is supported by solid underlying financial quality (strong operating margins and robust free cash flow) and a constructive earnings update with continued growth guidance and strong profitability. These positives are tempered by weak near-term technicals (below key moving averages and negative MACD) and lingering concerns around earnings volatility (recent net margin weakness) plus modest income support from the low dividend yield.
Positive Factors
High operating margins
Sustained high gross and operating margins reflect a favorable product mix (MCUs/SoCs, analog/power) and pricing power in automotive and industrial end markets. These margins provide durable internal funding for R&D and reinvestment, cushioning cyclical downturns and supporting long-term competitiveness.
Negative Factors
Earnings volatility and weak net margin
Inconsistent net profitability undermines return-on-equity and makes cash-flow-to-earnings conversion less predictable. Persistent volatility complicates long-term capital allocation, weakens stakeholder confidence, and raises the bar for sustaining investment programs during downturns.
Read all positive and negative factors
Positive Factors
Negative Factors
High operating margins
Sustained high gross and operating margins reflect a favorable product mix (MCUs/SoCs, analog/power) and pricing power in automotive and industrial end markets. These margins provide durable internal funding for R&D and reinvestment, cushioning cyclical downturns and supporting long-term competitiveness.
Read all positive factors
Renesas Electronics (6723) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥6.12T
Dividend Yield0.81%
Average Volume (3M)11.54M
Price to Earnings (P/E)18.3
Beta (1Y)1.43
Revenue Growth16.78%
EPS GrowthN/A
CountryJP
Employees21,907
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)187.76
Shares Outstanding1,870,614,900
10 Day Avg. Volume12,754,450
30 Day Avg. Volume11,541,726
Financial Highlights & Ratios
PEG Ratio0.61
Price to Book (P/B)1.58
Price to Sales (P/S)2.93
P/FCF Ratio11.11
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥5,820.00Price Target Upside48.17% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)232.37
Revenue Forecast (FY)¥1.58T
Renesas Electronics Business Overview & Revenue Model
Company Description
Renesas Electronics Corporation, headquartered in Tokyo, Japan, is a global technology firm specializing in semiconductors. Its comprehensive activities span the entire product lifecycle, from initial research, development, and design through manu...
How the Company Makes Money
Renesas primarily makes money by selling semiconductor products (and related embedded solutions) to equipment manufacturers and system suppliers, with revenue recognized from shipments of chips and, in some cases, associated software/solutions tha...
Renesas Electronics Earnings Call Summary
Earnings Call Date:Jul 31, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call presented strong commercial performance and profitability beats: healthy YoY and QoQ revenue growth, high gross and operating margins, notable GAAP net profit benefit, and continued demand in automotive, IoT and data center. Offsetting risks include margin pressure from higher manufacturing costs, earthquake-related supply-chain uncertainty for customers, the planned closure of a 6-inch factory (Takasaki), memory shortages in parts of IoT, and postponed ERP/investment execution. On balance, operational execution and demand strength dominate the narrative despite near-term cost and structural challenges.Positive Updates
Beat vs Guidance — Revenue Upside
Q2 revenue exceeded the guidance median by 4.5%; management cited FX tailwind and stronger-than-expected demand in automotive and IoT as main contributors.
Negative Updates
Margin Pressure from Rising Manufacturing Costs
Management forecasts Q3 gross margin of 57.5% (down 0.6 percentage points Q-on-Q) due to higher manufacturing costs (energy, labor, maintenance) — they quantified the Q3 mix as utilization benefit +50 bps vs manufacturing cost headwind -100 bps.
Read all updates
Q2-2026 Updates
Positive
Negative
Beat vs Guidance — Revenue Upside
Q2 revenue exceeded the guidance median by 4.5%; management cited FX tailwind and stronger-than-expected demand in automotive and IoT as main contributors.
Read all positive updates
Company Guidance
Renesas guided Q3 median revenue of JPY 430 billion, gross profit margin 57.5% (−0.6 ppt Q‑on‑Q), operating margin 32.5% (−0.2 ppt Q‑on‑Q) with FX assumptions of JPY 159/USD and JPY 184/EUR; management said this implies +28.7% YoY and +6.1% Q‑on‑Q on the stated basis. For Q2 they reported revenue JPY 45.3 billion, gross margin 58.1%, operating profit JPY 132.7 billion (OP margin 32.7%), EBITDA JPY 154.3 billion and profit attributable JPY 113.3 billion, with Q2 revenue ~4.5% above the guidance median and reported +8.8% Q‑on‑Q and +24.8% YoY. Operational metrics: fab utilization was 58% in Q2 and is expected to edge up in Q3, CapEx focused on R&D, inventory plans call for increasing in‑house and die‑bank levels while WOI is expected to decline as sell‑through rises; FX sensitivity is ~JPY 2.0 billion revenue / JPY 0.9 billion OP per JPY1 move in USD and ~JPY 0.2 billion revenue / JPY 0.1 billion OP per JPY1 move in EUR. On a GAAP basis Q2 net profit was JPY 149.2 billion (Wolfspeed‑related financial income) and management noted a timing gain from a business transfer that will be reflected in Q3.Renesas Electronics Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
70
Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.49T | 1.32T | 1.35T | 1.47T | 1.50T | 993.91B |
| Gross Profit | 758.27B | 636.22B | 752.40B | 834.63B | 859.63B | 544.34B |
| EBITDA | 525.71B | 404.42B | 340.96B | 459.96B | 516.82B | 307.18B |
| Net Income | 340.91B | -51.76B | 219.08B | 337.09B | 256.63B | 119.54B |
Balance Sheet | ||||||
| Total Assets | 4.56T | 4.18T | 4.49T | 3.17T | 2.81T | 2.43T |
| Cash, Cash Equivalents and Short-Term Investments | 376.02B | 295.90B | 229.25B | 434.68B | 336.07B | 221.92B |
| Total Debt | 1.16T | 1.21T | 1.42T | 667.66B | 770.01B | 831.32B |
| Total Liabilities | 1.71T | 1.73T | 1.95T | 1.16T | 1.28T | 1.27T |
| Stockholders Equity | 2.85T | 2.44T | 2.54T | 2.00T | 1.53T | 1.15T |
Cash Flow | ||||||
| Free Cash Flow | 410.38B | 347.87B | 195.59B | 402.98B | 407.24B | 261.76B |
| Operating Cash Flow | 494.52B | 437.02B | 325.48B | 491.20B | 473.38B | 298.70B |
| Investing Cash Flow | -136.50B | -124.69B | -1.28T | -267.49B | -97.52B | -663.13B |
| Financing Cash Flow | -247.50B | -253.84B | 692.35B | -175.82B | -288.82B | 349.60B |
Renesas Electronics Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | ¥147.22B | 14.76 | 5.50% | 2.64% | -14.55% | 94.44% | |
67 Neutral | ¥6.12T | 18.33 | -0.42% | 0.71% | 16.78% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | ¥19.62B | 16.38 | ― | 3.98% | 4.66% | ― | |
50 Neutral | ¥1.73T | -10.55 | -18.27% | 1.08% | 7.29% | -216.39% | |
46 Neutral | ¥10.81B | -23.27 | ― | 1.86% | 11.06% | -804.16% | |
41 Neutral | ¥166.61B | -17.51 | ― | ― | -34.08% | -123.00% |
* Technology Sector Average
JP:6723
Renesas Electronics
3,673.00
1,968.36
115.47%
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Renesas Electronics Corporate Events
Renesas Books ¥63.3 Billion Finance Gain on Wolfspeed-Linked Assets
Jul 31, 2026
Renesas Electronics said it recorded finance income of 63,254 million yen in the quarter ended June 30, 2026, driven by valuation gains on other financial assets linked to Wolfspeed, Inc., primarily reflecting a rise in Wolfspeed’s share pri...
Renesas Raises Nine-Month Outlook with Strong Non-GAAP Margins
Jul 31, 2026
Renesas Electronics has issued consolidated non-GAAP financial forecasts for the nine months ending Sept. 30, 2026, projecting revenue between ¥1,200,113 million and ¥1,215,113 million. The company expects a gross margin of 58.2% and an ...
Renesas Electronics Swings to Strong Profit and Raises 2026 Margin Outlook
Jul 31, 2026
Renesas reported a sharp recovery in its first half of 2026, with revenue rising 25.9% year on year to ¥798.7 billion and operating profit surging more than threefold to ¥192.7 billion. The company swung from a large loss a year earlier ...
Renesas Books Big Gain as Timing Business Transfer to SiTime Closes
Jul 1, 2026
Renesas Electronics said it has completed the transfer of its timing business to California-based SiTime Corporation, finalizing a deal first announced in early February. The two companies plan to continue developing their partnership, underscorin...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.