CLSA cuts Minebea Mitsumi stock target, keeps outperform

On Tuesday, Minebea Mitsumi Inc. (6479:JP) (OTC: MNBEY) saw its price target lowered by investment firm CLSA to JPY3,900 from the previous JPY4,600. Despite the reduction, CLSA maintained an Outperform rating on the company's shares. The adjustment was made to reflect several factors impacting the company's operations, including a downward revision in auto-sales forecasts for its motors, access solutions, and bearings segments.

The revised price target also takes into account the impact of a stronger Japanese yen, now assumed to be JPY145/US$ compared to the earlier JPY155/US$. Additionally, the company is expected to face a loss of market share in new gaming console assemblies. However, the outlook for Minebea Mitsumi's camera actuator segment remains stable, with the production issues for new models resolved quickly and client orders on the rise.

CLSA has adjusted its forecast for Minebea Mitsumi's operating profit for fiscal years 2025 to 2027, reducing estimates by approximately JPY4 billion to JPY9 billion, which is around a 4-6% decrease, bringing the projections to JPY103 billion to JPY136 billion. These figures are now more aligned with consensus estimates.

The firm also altered its target earnings multiple for Minebea Mitsumi from 20 times to 18 times, reflecting a broader market derating. This change in multiple is a contributing factor to the decrease in the price target for the company's stock. Despite these adjustments, CLSA continues to recommend Minebea Mitsumi as an Outperform, indicating a positive outlook on the stock's performance relative to the market.

In other recent news, Minebea Mitsumi has been the focus of a positive outlook from investment firm Jefferies, which raised the company's share price target to ¥4,600 from the previous ¥4,600. The firm maintains a Buy rating on the stock. This adjustment reflects favorable market conditions and a weak yen, factors expected to enhance Minebea Mitsumi's earnings beyond its fiscal year March 2025 guidance.

Jefferies analysts have expressed confidence in the company's performance, predicting earnings to surpass the guidance for FY3/25. This is backed by current currency trends and the general market environment, which are seen as beneficial to Minebea Mitsumi's financial growth.

In addition to the favorable economic conditions, Jefferies anticipates steady growth in specific segments of Minebea Mitsumi's operations. The segments mentioned include Precision Components, Special Devices, Machined Components, and Electronic Devices & Components. These areas are expected to contribute to the company's expansion and financial performance starting from fiscal year March 2026.

These are recent developments that signify Jefferies' belief in the company's potential for growth and profitability. Investors are closely monitoring the impact of currency fluctuations and market dynamics on multinational corporations like Minebea Mitsumi, which is expected to navigate these conditions effectively.

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