Panasonic Earnings: Delayed Recovery of Appliances and Electric Devices Is Largely Priced In

We maintain our fair value estimate for Panasonic Holdings at JPY 1,700. While we are lowering our operating income forecasts for cyclical business segments due to the prolonged economic downturn, we are incorporating the continued impact of the Inflation Reduction Act from fiscal 2024 (ending March 2025) and beyond, making our earnings forecasts largely unchanged. While it was disappointing that Panasonic lowered its operating income guidance for fiscal 2023 to JPY 400 billion from JPY 430 billion, we believe that the weak fundamentals are largely factored into the current stock price. We view Panasonic's shares are currently slightly undervalued at around 4 times 2024 EV/EBITDA, which is at the lower end of the historical range.