Investors interested in Industrial Products stocks should always be looking to find the best-performing companies in the group. Fanuc Corp. (FANUY) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Industrial Products peers, we might be able to answer that question.Fanuc Corp. is a member of the Industrial Products sector. This group includes 1 ...

Group 1 - The research service Asia Value & Moat Stocks targets value investors looking for Asia-listed stocks with significant discrepancies between price and intrinsic value, focusing on deep value balance sheet bargains and wide moat stocks [1] - Fanuc Corporation is highlighted as a Buy-rated stock, with previous analysis covering its operations in India and Mainland China [1] - The author of the research service provides investment ideas specifically for the Hong Kong market, emphasizing deep value and wide moat opportunities [1]

Core Viewpoint - Fanuc Corporation's outlook has improved significantly, with favorable prospects in the Indian and Chinese markets, leading to a bullish stance on the stock [1][2]. Financial Performance - Analysts' consensus for FY 2024 top line estimate has been raised by +2.5% to JPY 804.0 billion, and operating income forecast revised upwards by +5.2% to JPY 150.9 billion [2]. - The company's management has increased FY 2024 revenue and operating profit guidance by +5.1% to JPY 784.3 billion and +8.2% to JPY 143.0 billion, respectively [2]. - Actual Q1 FY 2024 revenue and operating income exceeded sell-side estimates by +3.6% and +4.1%, respectively [2]. Market Performance - The Chinese market was the best performer for Fanuc in Q1 FY 2024, with revenue from China increasing by +11.8% QoQ, while Japan's sales rose by +0.5% QoQ [4]. - The Chinese operations are expected to benefit from significant investments in equipment upgrades by state-owned enterprises, with a projected contribution of 22.7% to Q1 FY 2024 top line [4]. Growth Prospects - Fanuc's Indian market presence is expected to grow, with the company emphasizing the need to elevate its operations in India, where robot penetration is currently low [5]. - The company has a strong market share in India, having operated there since 1992, positioning it well for future growth [5]. Valuation - The stock is currently trading at a discount to fair valuation, with a target P/E multiple of 31.2 times compared to the current consensus FY 2025 P/E ratio of 24.8 times, indicating a potential upside of +26% [7].

Core Viewpoint - Fanuc Corporation is expected to outperform analysts' expectations for Q1 FY 2024, with a bullish outlook supported by recent industry data and management commentary [2][4][10]. Company Performance - The company reported a significant reduction in inventory levels in China, indicating a potential recovery in orders for factory automation products [2]. - Analysts predict that Fanuc's Q1 FY 2024 revenue and operating income will exceed expectations, contrasting with the consensus forecast of a decline in top line and operating profit by -7.9% YoY and -6.3% YoY, respectively [15]. Industry Context - Japan's total machine tool order value increased by +4.2% YoY and +3.0% MoM to JPY124.6 billion, suggesting a recovery in the factory automation sector [2]. - The global automation and robotics market is projected to grow by +32% from 2023 to 2025, reaching $346 billion, which bodes well for companies like Fanuc [9]. Valuation Insights - Fanuc's current P/E multiple is 24.6 times for FY 2025, which is lower than its historical averages of 29.2 times and 32.2 times over three and ten years, respectively [9]. - The company's expected EPS CAGR forecast of +26.0% from FY 2023 to FY 2025 supports a higher valuation, with a target P/E multiple of 31.2 times based on a PEG ratio of 1.2 [9]. Investment Recommendation - The stock is rated as a Buy due to its undervaluation relative to growth prospects and historical trading averages [4][10].

Yuichi Yamazaki Elevator Pitch I have a Hold rating for Fanuc Corporation (OTCPK:FANUF) [6954:JP]. Japanese company Fanuc Corporation calls itself "one of the worldwide leaders in factory automation for CNC control systems, robots and production machinery" in its media releases. Fanuc Corporation is awarded a Hold rating taking into account the stock's valuations, the company's shareholder return, and its business outlook. The stock's +3.2% shareholder return yield is reasonably good which should limit ...