Deutsche Bank: FANUC — Strong FY Results and Orders Provide Solid Foundation for FY1Q; Pre-ordering to Watch
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FANUC reported strong fiscal fourth-quarter results for the period ending March 2026, with several metrics exceeding expectations. Fourth-quarter sales reached JPY 234.5 billion, up 11% year-over-year, while operating profit climbed 16% to JPY 56 billion and net income rose 11% to JPY 49.7 billion, beating FactSet consensus by 6%, 13%, and 13% respectively. Orders hit a record quarterly high of JPY 252 billion, representing 19% year-over-year growth and a book-to-bill ratio of 1.07x.
By segment, factory automation orders surged 40% year-over-year, robotics orders grew 11%, and machine tool orders turned positive at 17%. Regionally, Chinese orders accelerated by 55% and Japanese orders by 29%, while Americas growth moderated to just 1%. The company's fiscal 2027 guidance projects sales of JPY 909.6 billion and net income of JPY 184.9 billion, broadly in line with consensus, though management's historically conservative stance may be viewed positively by the market.
Deutsche Bank raised its target price from JPY 6,000 to JPY 7,000 while maintaining a Hold rating. The bank's own forecasts exceed management guidance, modeling fiscal 2027 sales of JPY 956.4 billion and operating profit of JPY 220 billion, supported by a five-percentage-point foreign exchange tailwind. Key positives include AI robotics orders exceeding initial expectations through the NVIDIA partnership and a newly announced share buyback of up to JPY 50 billion. However, potential pre-ordering effects and the limited execution of the previous buyback program warrant caution.