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Equity Bottom-Up

<p>Excluding a favorable foreign exchange rate, narrow-moat <a href="https://www.smartkarma.com/entities/18703" target="_blank" data-smartkarma-citation="entities:18703:1">Denso Corp (6902 JP)</a>'s third-quarter result was generally in line with our full-year forecast and consensus. We increase our fair value estimate to JPY 6,400 from JPY 6,100 to reflect higher euro and Renminbi against the Japanese yen, which together increased our fiscal 2018 operating income by more than 5%. Our medium-term operating margin assumption of 8% is retained. The stock is fairly valued. Encouragingly, the sale of Denso’s moaty…</p>

Excluding a favorable foreign exchange rate, narrow-moat Denso Corp (6902 JP)'s third-quarter result was generally in line with our full-year forecast and consensus. We increase our fair value estimate to JPY 6,400 from JPY 6,100 to reflect higher euro and Renminbi against the Japanese yen, which together increased our fiscal 2018 operating income by more than 5%. Our medium-term operating margin assumption of 8% is retained. The stock is fairly valued. Encouragingly, the sale of Denso’s moaty…

Denso Reports in Line 3Q Result, Raise FVE to JPY 6,400 on Stronger Renminbi and Euro.