UBS has upgraded Makino Milling Machine Co Ltd (6135:JP) from “Neutral” to “Buy,” citing strong growth potential and improved profitability, even as the investment bank lowered its price target from JPY11,600 to JPY10,700.
The upgrade follows a shift in UBS’s valuation approach after Nidec Corporation withdrew its tender offer for Makino. Analysts now believe the company’s stock is undervalued, considering its stable earnings outlook.
UBS pointed to strong demand for Makino’s high-end machine tools as a major factor supporting its view. The company is seeing increased interest in key global markets, including India, North America—especially in the auto parts and aviation sectors—and China’s fast-growing new energy vehicle industry.
The analysts noted that Makino is successfully moving towards higher value-added products. This strategic shift, along with rising aftermarket sales, is boosting the company’s profit margins.
UBS also praised Makino’s efforts to improve shareholder returns. This, combined with solid sales growth and operational improvements, supports the firm’s bullish stance on the stock.
Overall, UBS expects Makino to maintain momentum as demand for precision machinery continues to grow in sectors less impacted by global tariffs.
