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Investing.com -- Morgan Stanley has named a Japanese electronics giant as a new Top Pick, lifting its price target to JPY2,500 from JPY2,100 per share in a note on Wednesday.
The bank told investors that Panasonic Holdings’ more muted stock performance in 2025, up just 11% year-to-date, masks a stronger long-term story driven by data center demand rather than electric vehicles.
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According to Morgan Stanley, Panasonic has lagged “mainly due to uncertainty in the automotive battery business.”
However, analyst Kazuo Yoshikawa now argues that growing confidence in the company’s Energy segment, particularly “industrial and consumer batteries centered on data centers,” should offset the stagnation expected in automotive batteries from FY3/27 onward.
If this shift becomes clearer, Yoshikawa believes “recognition of Panasonic as an AI/data center play could increase, leading to multiple expansion.”
A key driver behind Morgan Stanley’s bullishness is the company’s battery backup unit (BBU) roadmap.
The bank highlights that “over 80% of projected BBU sales through FY3/29 are already ‘awarded,’” with additional rack-design discussions ongoing.
Upcoming launches are said to include Built-in CBU shelves in FY3/27 and high-voltage BBUs in FY3/29, both described as next-generation products.
Morgan Stanley has also raised its valuation multiple for the industrial and consumer battery business, increasing the applied EBITDA multiple from 9x to “about 11x,” reflecting stronger growth prospects for data center BBUs.
The bank believes the stock’s risk-reward is “favorable,” and notes that Panasonic’s renewed focus adds to the investment case.