Komatsu Ltd (6301:JP) Downgraded to Underperform by BofA Securities, Price Target Slashed
On Friday, Komatsu Ltd (6301:JP) was downgraded by BofA Securities from Neutral to Underperform, with the price target lowered to JPY3,500 from JPY4,900. The revision is based on changes in the fiscal year March 2025 operating profit forecast, driven by new forex assumptions.
BofA Securities has adjusted its currency exchange rate expectations to ¥140/USD and ¥160/EUR, with a decrease in equipment volume sales in Europe offset by higher projections for China and Asia. North America is expected to see a slowdown, as previously anticipated.
The forecast for the fiscal year ending March 2026 has also been revised, with North American construction equipment growth expectations reduced from a 3% increase to a 6% decrease. Despite these changes, projections for other regions remain stable.
The decline in operating profit forecast for FY3/26 compared to FY3/25 has led to a sharp decrease in Komatsu's price target. BofA Securities' updated analysis reflects their outlook on the company's performance in light of global economic conditions and currency market dynamics.
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Analysis:
Komatsu Ltd has been downgraded to Underperform by BofA Securities, with a reduced price target. The revision is based on changes in operating profit forecasts and currency assumptions. This could indicate potential challenges for the company's performance in the coming years, especially in North America. Investors should consider this information when making decisions about their investments in Komatsu stock.