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TDK Corp 6762

Morningstar Rating
JPY 7,262.00 −4.00 (0.06%)
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Company Report

TDK: Passive Components Suppliers’ Earnings: Cautious Guidance Amid Uncertainty Over Demand Recovery

Three passive component suppliers, Murata Manufacturing, Kyocera, and TDK announced their earnings results for fiscal 2023 (ending March 2024) Friday, April 26, and each company’s operating income guidance for the new fiscal year fell short of our expectations. We believe that they made conservative assumptions for sales and capacity utilization especially in the second half of the fiscal year, as they were less confident of a full recovery in end demand. Nevertheless, TDK’s guidance may disappoint the market as it is most divergent from our expectations and the market’s. While we maintain our fair value estimates for the three companies, we have lowered our fiscal 2024 operating income forecasts for Murata and Kyocera, reflecting price erosion for automotive passive components and a slower-than-expected recovery in capital spending for industrials and general servers. We plan to revise our TDK earnings forecasts after the company announces its new midterm plan at next month’s investor day. We believe Murata Manufacturing’s shares are undervalued, while Kyocera and TDK are fairly valued.

Price vs Fair Value

6762 is trading at a 577% premium.
Price
JPY 7,262.00
Fair Value
JPY 6,839.00
Uncertainty
High
1-Star Price
JPY 32,294.00
5-Star Price
JPY 9,633.00
Economic Moat
Zyw
Capital Allocation
Sjzfdkfv

Bulls Say, Bears Say

Bulls

TDK will maintain its position as the global top supplier of passive components for automobiles and will benefit from increasing electronic devices per car.

Bears

Contraction of the HDD market could be faster than the market expectation, which is the risk factor for TDK’s profitability.

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News

Trading Information

Previous Close Price
JPY 7,266.00
Day Range
JPY 7,116.007,310.00
52-Week Range
JPY 4,787.008,228.00
Bid/Ask
JPY 7,246.00 / JPY 7,263.00
Market Cap
JPY 2.76 Tril
Volume/Avg
1.8 Mil / 1.9 Mil

Key Statistics

Price/Earnings (Normalized)
29.55
Price/Sales
1.31
Dividend Yield (Trailing)
1.60%
Dividend Yield (Forward)
1.65%
Total Yield
1.60%

Company Profile

Founded in 1935, TDK has its origin in magnetic materials, being the first company to commercialize ferrite in the world, and it used to be known as one of the major cassette-tape manufacturers. TDK is now the only external supplier for magnetic recording heads for hard disk drives, and the company intends to expand its magnetic sensor business for handsets and automobiles by leveraging its expertise. It is also one of the global top suppliers of passive components for autos and polymer rechargeable batteries for smartphones. The company acquired InvenSense in 2017, making it one of the largest MEMS sensor companies in the world.
Sector
Technology
Industry
Electronic Components
Stock Style Box
Large Core
Total Number of Employees
102,908

Competitors

Valuation

Metric
6762
6976
6981
Price/Earnings (Normalized)
29.55170.8424.70
Price/Book Value
1.611.212.11
Price/Sales
1.311.303.29
Price/Cash Flow
8.469.6613.92
Price/Earnings
6762
6976
6981

Financial Strength

Metric
6762
6976
6981
Quick Ratio
1.212.322.64
Current Ratio
1.673.694.39
Interest Coverage
3.770.49
Quick Ratio
6762
6976
6981

Profitability

Metric
6762
6976
6981
Return on Assets (Normalized)
3.73%0.78%7.44%
Return on Equity (Normalized)
7.92%1.29%8.90%
Return on Invested Capital (Normalized)
5.36%0.83%9.79%
Return on Assets
6762
6976
6981
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Electronic Components Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
APH
Amphenol Corp Class AHcxcdgktssQnldk$79.1 Bil
HNHPF
Hon Hai Precision Industry Co Ltd DRKpzx$73.3 Bil
TEL
TE Connectivity LtdMdvmjcgbKfymf$46.3 Bil
MRAAF
Murata Manufacturing Co LtdChsbddz$34.8 Bil
MRAAY
Murata Manufacturing Co Ltd ADRSjrpyw$34.5 Bil
GLW
Corning IncLvpsqvfgrWwlxb$30.2 Bil
TTDKY
TDK Corp ADRSgl$17.7 Bil
TTDKF
TDK CorpZnxz$17.7 Bil
JBL
Jabil IncLfcpqxlyXgqy$13.9 Bil
LFUS
Littelfuse IncHdzhcjzdhHwlsrn$6.4 Bil

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