Daifuku: Revising our Morningstar Uncertainty Rating to Medium

We assign Daifuku a Morningstar Uncertainty Rating of Medium, based on our revised expectations of material handling equipment demand for warehouses, factories, and airports. Although the pandemic-induced e-commerce demand had previously led to a surge in orders and increased the uncertainty for its intralogistics business, we expect demand will be relatively stable after the current postpandemic slowdown from 2024 onward. Further, the company’s balanced exposure to various customer industries and stable service income (which makes up approximately 20% of intralogistics sales and above 45% of automobile/airport sales) will mitigate the impact of demand fluctuations in highly cyclical industries.