Fanuc (6954.T): Reduce TP on estimate cuts, a lower sector multiple and a lower relative premium; maintain Sell

We maintain our Sell rating on Fanuc (6954.T). The share price has declined 22% over the past three months, significantly underperforming TOPIX (+3%), the average of our 27-stock Japan industrials coverage (-12%) and the FA sector average (-14%). Channel checks indicate Fanuc's company-specific procurement difficulties (ICs, memory, PCBs and other components) persist, while competitors such as Mitsubishi Electric and Syntec report no notable disruption, implying a high probability of company-specific supply constraints and risk of market share loss — a key reason for our Sell rating. We cut operating profit estimates by 0%/-3%/-3%: FY3/27 ¥235bn (prev. ¥236bn), FY3/28 ¥195bn (prev. ¥201bn), FY3/29 ¥180bn (prev. ¥186bn), reflecting persistent cost inflation and reduced likelihood of aggressive price increases. We lower the fair sector EV/EBITDA multiple to 9X from 10X, cut the sector-relative premium to 60% from 70%, and roll the valuation base forward six months, reducing our 12-month