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Fanuc Corp FANUY

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Strong Robodrill and CNC Orders Will Likely Boost Fanuc’s Near-Term Sales; Raising FVE to JPY 25,000

Jason Kondo Equity Analyst

Analyst Note

| Jason Kondo |

Wide-moat Fanuc’s latest earnings results in the fourth quarter surpassed our expectations due to an unexpected rise in sales in the Asia ex China region (particularly India) and also stronger-than-expected year-on-year increase of sales for Robodrills in China, due to high demand for PCs and tablets amid the coronavirus pandemic. We raise our fair value estimate to JPY 25,000 from JPY 22,000, after adjusting our revenue projections and raising our operating margin assumptions to account for the effects of operating leverage. Our revision is mainly based on stronger expectations of Fanuc’s factory automation, or FA, business sales in Asia, which are driven by computer numerical control systems, or CNCs, as well as stronger near-term demand for Robodrills (compact drilling equipment used to shape 3C products like consumer electronics). From a valuation perspective, we believe that current price levels of Fanuc are fairly valued (as of April 30, 2021), and that both cyclical post-coronavirus recovery and secular growth factors like increased need for social distancing are already priced in.

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Company Profile

Business Description

Fanuc Corporation provides factory automation products, such as industrial robots, computerized numerical control (CNC) systems, and compact machining centers (Robodrills) to mainly manufacturing companies globally. Fanuc had its beginnings as part of Fujitsu developing early numerical control (NC) systems, and now commands the top global market share with its CNC systems and industrial robots. Fanuc has approximately 260 service stations across the world and currently has more than 4 million CNC controls and 550,000 robots installed globally.

Contact
Oshino-mura
Yamanashi Prefecture, 401-0597, Japan
T +81 555845555
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings Dec 31, 2020
Fiscal Year End Mar 31, 2020
Stock Type
Employees 10,249

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