Komatsu Ltd

6301: XTKS (JPN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	¥‎5,427.00	Pdrylg	Kmpsdyqnp

Komatsu’s Fiscal-Year 2020 Below Expectations and Guidance; FVE Lowered on Near-Term Uncertainties

May 18, 2020

We cut our fair value estimate for Komatsu to JPY 2,200 per share ($20.50 per ADR) from JPY 2,380 per share ($22 per ADR), after rolling forward our model and taking into account lower revenue and profitability mainly in its construction, mining, and utility equipment division due to the COVID-19 outbreak. Our narrow moat and stable moat trend ratings on the firm remain intact. We think the shares are fairly valued at the current price, with near-term weakness from the machinery sales priced in.

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