Macquarie upgrades Disco stock rating to Outperform on memory sector demand

Published 09/07/2025, 11:26
Macquarie upgrades Disco stock rating to Outperform on memory sector demand

Investing.com - Macquarie has upgraded Disco Corp. (6146:JP) (OTC:DSCSY) from Neutral to Outperform, while raising its price target to JPY48,500.00 from JPY28,500.00.

The research firm expects Disco to exceed its first-quarter guidance, forecasting operating profit of ¥35.5 billion on sales of ¥90.9 billion, compared to the company’s guidance of ¥23.8 billion and ¥75 billion respectively. Macquarie attributes this potential outperformance to the weaker yen and faster revenue recognition on equipment.

Macquarie anticipates a significant quarter-over-quarter sales increase in the second quarter, projecting sales of ¥130.9 billion and operating profit of ¥64 billion. This outlook is substantially higher than the current consensus estimates of ¥107.5 billion in sales and ¥49 billion in operating profit.

The firm has raised its fiscal year 2026 operating profit estimate to ¥180 billion from ¥162.5 billion, citing stronger memory sector tool demand and sustained strength in CoWoS/advanced packaging-related sales.

Macquarie forecasts an 8% operating profit compound annual growth rate for Disco between fiscal years 2025 and 2034, with potential upside from Micron (NASDAQ:MU)’s capital expenditure potentially driving stronger HBM-related tool sales in the second quarter.

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