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Komatsu Ltd ADR KMTUY

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Komatsu’s Third-Quarter Fiscal 2021 on Track To Meet Full-Year Guidance; Gradual Recovery Intact

Ken Foong, CFA Equity Analyst

Analyst Note

| Ken Foong, CFA |

We increase our fair value estimate for Komatsu to JPY 2,710 per share (USD 26 per ADR) from JPY 2,310 (USD 22 per ADR) after considering the slightly quicker-than-expected recovery in third-quarter fiscal 2021 (ending March) and fine tuning our long-term estimates. Our narrow moat and stable moat trend ratings remain intact. We think the shares are fairly valued at the current price, with a gradual recovery in machinery sales priced in.

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Company Profile

Business Description

Tokyo-based Komatsu is the second-largest construction equipment manufacturer in the world by revenue. Its core construction, mining, and utility equipment business contributes around 90% of revenue. The remainder comes from its retail finance business and industrial machinery and others, which includes metal forging, machine tools, stamping presses, and defense-related equipment. The Americas and Asia are Komatsu's main markets, accounting for more than 80% of revenue, followed by Europe and the Commonwealth of Independent States.

Contact
3-6 Akasaka 2-chome, Minato-ku
Tokyo, 107-8414, Japan
T +81 355612628
Sector Industrials
Industry Farm & Heavy Construction Machinery
Most Recent Earnings Dec 31, 2020
Fiscal Year End Mar 31, 2020
Stock Type
Employees 68,879