---
endpoint: analytics
pattern: Technology
status: done
latency_ms: 217476
conversation_id: 164b3edd-d76a-4924-beb6-c9c62142f6a4
citations: 10
created: 2026-05-31 20:39:53Z
---

# Is CLSA incrementally more positive/negative on Keyence. If so, why?

## CLSA on Keyence (6861 JP) — incremental stance

**Headline view: stance has been stable, not incrementally more bullish or more bearish, but the *qualitative* lean within that stable rating has tilted modestly more positive on operations and modestly more cautious on shareholder-return execution.**

CLSA's formal call has held at **Outperform (O-PF), target price ¥80,000** through every Keyence-relevant note since 7 April 2025. The last actual *change* in stance was the **TP cut from ¥85,000 → ¥80,000 on 7 April 2025** in the "I shot the tariff" note — driven by tariffs and a stronger-yen FX revision (¥150 → ¥145/US$), with rating reiterated as O-PF [1][5].

### Timeline of CLSA's stance

| Date | Note | Rating | TP | Direction |
|---|---|---|---|---|
| 28 Jun 2024 | Rating-system shift | BUY → O-PF | ¥85,000 | System change, not view change |
| **7 Apr 2025** | "I shot the tariff" | O-PF | **¥85,000 → ¥80,000** | **Negative delta** (tariff + FX) [1] |
| 25 Apr 2025 | "Moving on up" (4Q results) | O-PF | ¥80,000 (held) | Implicitly more positive [2][3] |
| 2 May 2025 | "Rare earths — politics vs engineering" | O-PF | ¥80,000 | Reiterated as **top FA pick** [4] |
| 2 Jun 2025 | "Japan machinery — Fear of the unknown" | O-PF | ¥80,000 | Stable; tone mixed [6][9][10] |

Source: CLSA recommendation history table dated 7 Apr 2025 onward confirms the BUY → O-PF transition on 28 Jun 2024 and the TP step-down on 7 Apr 2025 [5].

### Where CLSA is incrementally MORE POSITIVE

1. **Operating execution has surprised to the upside, and CLSA absorbed an additional FX headwind without cutting the TP.** The 25 Apr post-results note further lowered the FX assumption from **¥145 → ¥140/US$** — a tougher backdrop for a Japan-based exporter — yet kept the ¥80,000 TP intact. That is an implicit upgrade of the underlying operating outlook to offset a stronger yen [2].

2. **Best-ever quarterly print mid-downcycle.** Jan–Mar 2025 revenue of ¥284bn was an all-time single-quarter high, with Americas +11%, Asia +15%, Japan +9% YoY in local currency. CLSA wrote: *"Achieving historical highs in the middle of a capex downcycle is an achievement few companies can match… Keyence is our top pick among large-cap automation names"* [3].

3. **Designated as TOP factory-automation pick across two sector notes.** The 2 May rare-earths note labelled Keyence and Yaskawa as CLSA's *top factory-automation picks* [4]. The 2 June sector note continued the "top pick among large-cap automation names" framing [6], with implied **+32% upside** to the ¥80,000 target at the prevailing ¥60,740 price [9].

4. **DCF anchor is unchanged**: ¥80,000 fair value built on 6.5% ERP, 1.5% RFR, 7.7% WACC, 0.95 beta — the lower beta vs FA peers reflects "margin stability and ability to grow through economic downcycles." Net cash on ¥3tn equity (~90% net cash) is repeatedly flagged as a defensive positive in uncertainty [10].

### Where CLSA is incrementally MORE CAUTIOUS

1. **Shareholder-return execution disappointment.** Across both the 7 Apr and 25 Apr notes, CLSA flagged that management *could* deploy the cash-rich balance sheet to support the stock but **"we do not expect that to happen"** [1]. At Q4 results, CLSA repeated that *"it would have been nice to see a dividend hike or stock split from management to make the release more exciting"* [2].

2. **Investor pushback is hardening.** The 2 June sector update — based on 26 investors at the 21st CITIC-CLSA Japan Forum — found Keyence was *the most discussed FA name* but that *"most of the pushback on our positive view on the stock was related to high valuations and limited company disclosure. Some investors are frustrated with the lack of improvements in regards to shareholder returns"* [6].

3. **Sector positioning is heavy underweight.** *"The majority of investors we interacted with seems to be underweight or zero-weight Japanese FA stocks. We did not meet any investors who indicated that they were overweight the sector"* [8]. CLSA also acknowledged that *"some investors express frustration with such leading automation companies as Keyence as management so far has been unwilling to change"* on governance/payout [7].

### Net read

- **Formal CLSA view (Morten Paulsen / Edward Bourlet, Tokyo)**: **NOT incrementally more positive or negative since 7 April 2025**. Rating O-PF, TP ¥80,000 — held through three subsequent updates including post-results, sector outlook, and a thematic rare-earths note. The last actual delta was the 7 April TP cut.
- **Direction within the stable rating**: Operationally lean is **modestly more constructive** (TP held despite tougher FX, record quarter, named top large-cap FA pick). Governance/payout lean is **modestly more skeptical** (investor pushback now explicitly logged, not just CLSA's solo complaint).
- **Why the rating hasn't pushed higher**: Despite the operating beats, CLSA appears unwilling to upgrade past O-PF because (a) the DCF math already captures the operating quality (low 0.95 beta, premium margins), (b) the cash hoard is increasingly seen as *trapped* rather than *optional*, and (c) sector-wide investor positioning (UW FA) is a near-term de-rating risk that doesn't reverse without earnings revisions turning positive and PMIs sustaining above 50.

### Note on entity

Coverage is by CLSA proper (Japan analysts Morten Paulsen / Edward Bourlet), not CLST — Keyence is Japan-listed and outside CLST's Taiwan-focused remit, so there is no parent/subsidiary attribution issue here.

---

**Sources**
[1] *Keyence – O-PF (I shot the tariff)* — CLSA (7 Apr 2025) — 607955214LinqAlpha.PDF
[2] *Keyence – O-PF (Moving on up)* — CLSA (25 Apr 2025) — 607957011LinqAlpha.PDF
[3] *Keyence – O-PF (Moving on up)* — CLSA (25 Apr 2025) — 607957011LinqAlpha.PDF
[4] *Japan Industrial automation (Rare earths – politics vs engineering)* — CLSA (2 May 2025) — 607957903LinqAlpha.PDF
[5] *Japan Industrial automation (Rare earths – politics vs engineering)* — CLSA (2 May 2025), recommendation history table — 607957903LinqAlpha.PDF
[6] *Japan machinery (Fear of the unknown)* — CLSA (2 Jun 2025) — 607961010LinqAlpha.PDF
[7] *Japan machinery (Fear of the unknown)* — CLSA (2 Jun 2025) — 607961010LinqAlpha.PDF
[8] *Japan machinery (Fear of the unknown)* — CLSA (2 Jun 2025) — 607961010LinqAlpha.PDF
[9] *Japan machinery (Fear of the unknown)* — CLSA (2 Jun 2025), sector snapshot table — 607961010LinqAlpha.PDF
[10] *Japan machinery (Fear of the unknown)* — CLSA (2 Jun 2025), Keyence valuation section — 607961010LinqAlpha.PDF

## Citations

- [1] **607955214LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607955214LinqAlpha.PDF>
- [2] **607957011LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607957011LinqAlpha.PDF>
- [3] **607957011LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607957011LinqAlpha.PDF>
- [4] **607957903LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957903LinqAlpha.PDF>
- [5] **607957903LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957903LinqAlpha.PDF>
- [6] **607961010LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961010LinqAlpha.PDF>
- [7] **607961010LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961010LinqAlpha.PDF>
- [8] **607961010LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961010LinqAlpha.PDF>
- [9] **607961010LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961010LinqAlpha.PDF>
- [10] **607961010LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961010LinqAlpha.PDF>

