Denso Corp

6902: XTKS (JPN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	JPY 5,913.00	Smlkctg	Bhgcdqgv

Denso Earnings: Unexpected Quality-Related Costs Dent Margins but Outlook Unchanged

Jason Kondo

Nov 7, 2023

We leave our fair value estimate for Denso unchanged at JPY 2,375 with September-quarter operating margin disappointingly lower and dampening better-than-expected revenue growth. While we tweak our fiscal 2023 (ending March 2024) assumptions, our medium-term outlook remains intact. We believe Denso’s shares are fairly valued. Our fair value estimate prices Denso at 15.9 times fiscal 2023 price/earnings. We forecast five-year EPS to average 16.9% growth.

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