HSBC downgrades Fanuc stock to Hold despite price target increase

Published 06/08/2025, 11:28
HSBC downgrades Fanuc stock to Hold despite price target increase

Investing.com - HSBC downgraded Fanuc Corp (TYO:6954) (OTC:FANUY), a $27.56 billion industrial robotics giant, from Buy to Hold while slightly raising its price target to JPY4,900.00 from JPY4,800.00. According to InvestingPro data, the company maintains a "GOOD" overall financial health score.

The downgrade follows a significant rally of approximately 17% in Fanuc’s stock price after a recent trade deal, which has brought the company’s valuation to 24 times ex-cash forward price-to-earnings ratio. The current P/E ratio stands at 26x, with InvestingPro analysis indicating the stock is trading near its Fair Value.

HSBC noted this valuation is now in line with Fanuc’s past three-year average and its FY03/23 average when earnings per share grew 10% year-over-year, while the firm expects flat year-over-year EPS growth for FY03/26.

The investment bank believes the current valuation is fair after the recent rally and suggests recovery could be slower than expected due to Robomachine normalization and demand challenges in Japan and Europe.

HSBC identified potential catalysts for Fanuc that include faster-than-expected demand recovery in Japan or the United States following the trade deal.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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