Murata Mfg. (6981 JP): Buy on Decline for the Long Term

🇯🇵 JAPAN • Market Update - Levitating on Thin Air

Murata Mfg. (6981 JP): 1Q Profits Up, Orders Down

Murata Revises FY03/19 Guidance Following Solid 1H Performance

Capacity Expansions for Automotive Components to Offset Dwindling Handset Market

Electronic Component Manufacturers Record Strong Top-Line Growth in FY03/18

Equity Analyst, LightStream Research

Farha Sabri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul class="">
<li>Murata reported 3.4% YoY revenue growth to JPY427.6bn and 89.9% YoY OP growth to JPY85.6bn in its third quarter earnings.</li>
<li>Despite the strong third quarter performance, we, along with consensus, expect the company to underperform its revenue guidance. This is mainly due to the slowdown in the smartphone market, which is expected to persist in the current quarter as well.</li>
<li>Based on our estimates, Murata is currently trading at a FY1 PE multiple of 17.5x, lower than its historical median of 20.5x.</li>
</ul>


Murata reported 3.4% YoY revenue growth to JPY427.6bn and 89.9% YoY OP growth to JPY85.6bn in its third quarter earnings.
Despite the strong third quarter performance, we, along with consensus, expect the company to underperform its revenue guidance. This is mainly due to the slowdown in the smartphone market, which is expected to persist in the current quarter as well.
Based on our estimates, Murata is currently trading at a FY1 PE multiple of 17.5x, lower than its historical median of 20.5x.


Murata Up 12.8% Following 3QFY03/19 Earnings Release

Murata Manufacturing

Murata Up 12.8% Following 3QFY03/19 Earnings Release