MRAAY — Murata Manufacturing Co., Ltd.
Price when we picked it (Sep 15, 2026)
$23.71
Target: $32.70 (+46%)
P/E Ratio
49.9
P/E Forward
38.7
Dividend
0.97%
Market Cap
$81.6B
EPS
$0.4
Consensus
Strong Buy
What they do
Murata Manufacturing, headquartered in Nagaokakyo (Kyoto, Japan), is the world's largest maker of multilayer ceramic capacitors (MLCCs): tiny parts — many smaller than a grain of sand — that stabilize and filter the electricity inside any electronic circuit. Without them, a chip does not work. That is why they are in everything: smartphones, cars (especially electric ones), computers, home appliances and, more and more, artificial-intelligence servers.
Five product lines: capacitors (51% of sales), inductors and noise filters (12%), communication modules and high-frequency devices, batteries and power supplies, and sensors and SAW filters (together, 36%). By end market, in the latest quarter: communications 31%, mobility 26%, computers 20.5% (of which data centers were 13.9% of the total, +81% in a year), consumer electronics 7% and industrial 15%.
According to Nikkei, Murata holds ~40% of the global MLCC market; its rivals are Samsung Electro-Mechanics and Taiyo Yuden. 74,302 employees; President and CEO Norio Nakajima. Its fiscal year ends in March. The MRAAY ADR (depositary: Citibank) trades in dollars: 2 ADRs = 1 Tokyo share.
Why we like it
Three reasons.
- IT IS THE WAY TO OWN AI WITHOUT BETTING ON A SINGLE CHIP: it does not matter whether the server runs Nvidia, AMD or Google's own chip — they all need thousands of high-capacity capacitors, and Murata makes 4 out of every 10 in the world. Its data-center sales grew 81% in a year (¥69.7 billion in one quarter) and are already 13.9% of the total.
- THE NUMBERS ALREADY SHOW IT: a record April–June quarter — revenue ¥502,264 million (+20.7%), operating profit ¥98,454 million (+59.8%), net profit ¥81,377 million (+63.7%) — and record orders. On July 31 it raised full-year guidance: revenue ¥2.11 trillion (+15.2%) and operating profit ¥430 billion (+52.6%). It is also raising prices (rivals announced MLCC hikes of up to 30% from August) and expanding factories: a new 10-story building in Izumo and ~¥80 billion of extra investment for data centers.
- IT PAYS YOU AND BUYS BACK SHARES: a planned dividend of ¥70 per share this year (vs ¥65), with a policy of raising it every year, plus the largest share buyback in its history: ¥150 billion (~4% of the shares). Consensus Strong Buy with an average target of ¥10,485 per share in Tokyo (+46% vs the current ¥7,185). We are entering 42% below its June high ($38.72).
Key Risk
#1 is the price: the stock is up ~200% this year and trades at ~50 times earnings (39x expected earnings). It has already corrected ~40% from its June high, but a multiple like that leaves little room if AI growth slows for a quarter. Others:
- China is 47% of its sales and it depends on Chinese rare earths (a plan to decouple in ~3 years); a trade escalation hits it directly.
- Consumer cycle: the company itself expects smartphones −4% and PCs −10% this year because of memory-chip shortages, and warns that part of the record orders may be customers buying ahead for fear of running out of parts.
- Yen: every one-yen move against the dollar changes operating profit by ¥4.5 billion; it assumes ¥155 per dollar.
- Competition: Samsung Electro-Mechanics, Taiyo Yuden and subsidized Chinese makers.
- Costs: silver and other precious metals it uses as inputs, and logistics risks (Hormuz) the company cites.
- The dividend (~1%) is small: here the return comes from growth, not the coupon.
This is educational and informational content, not financial advice. Always consult a qualified financial advisor before making investment decisions.
Vectorial Data picked MRAAY on Aug 26, 2026 at $22.43.
Full Research
What it does, explained. A multilayer ceramic capacitor (MLCC) is a tiny part that stores and releases electricity in microseconds so the voltage inside a circuit stays stable. Every modern chip needs hundreds around it; a phone carries hundreds or thousands; an electric car and an AI server, many more. Murata Manufacturing (Nagaokakyo, Kyoto; TSE 6981; ADR MRAAY) is the world's largest maker: ~40% of the global MLCC market according to Nikkei. Capacitors are 51.1% of its sales (¥936.4 billion in fiscal 2025, +12.6%); inductors and filters 12.2%; devices and modules 35.9% (−5.9%, on weaker demand for smartphone modules).
By end market (April–June 2026 quarter). Communications 31.1%, mobility 26.2%, computers 20.5% — within that, data centers ¥69.7 billion = 13.9% of the total, +81.1% year over year —, consumer electronics 6.8%, industrial and other 15.4%. By region (fiscal 2025): Greater China 47.2%, Asia/other 20.5%, Americas 16.6%, Europe 8.4%, Japan 7.3%.
Results. April–June 2026 quarter (reported July 31, IFRS): revenue ¥502,264 million (+20.7%, +12.6% excluding currency; a record), operating profit ¥98,454 million (+59.8%), net profit ¥81,377 million (+63.7%), earnings per share ¥44.71. Record quarterly orders; management warned that some may be purchases pulled forward on fears of shortages. Fiscal 2025 (April 2025–March 2026): revenue ¥1.83 trillion (+5.0%, a record), operating profit ¥281,835 million (+0.8%), net profit ¥233,920 million (flat, on price declines and a goodwill impairment in SAW filters), ROIC 9.7%.
Fiscal 2026 guidance (to March 2027), raised on July 31. Revenue ¥2.11 trillion (+15.2%; +¥150 billion vs April), operating profit ¥430 billion (+52.6%; +¥50 billion), net profit ¥338 billion (+44.5%), earnings per share ¥185.68. Currency assumption ¥155/USD from the second quarter; sensitivity ¥9 billion of revenue and ¥4.5 billion of operating profit per yen. Capital expenditure ¥255 billion. Market assumptions: smartphones −4% (1,190 million units), vehicle production −3% (50.2% electrified), PCs −10%.
Prices and capacity. Samsung Electro-Mechanics raised MLCC prices ~30% from August 1, 2026 and Taiyo Yuden from September 1; Murata confirmed increases from April 1 on multilayer inductors and ferrite beads (silver cost) and, according to Bloomberg, explored increases on MLCCs for AI servers. Capacity: a 10-story building (~70,000 m², ~¥47 billion) completed in Izumo on April 3, 2026; ~¥80 billion of additional investment in MLCCs for data centers (¥40 billion in each of the next two fiscal years).
Shareholder returns. Fiscal 2025 dividend: ¥65 per share (¥30 + ¥35; payout 50.9%). Planned for fiscal 2026: ¥70 (¥35 + ¥35). Policy: raise the dividend steadily, targeting a 5% dividend on equity (DOE). Buyback: up to ¥150 billion / 75 million shares (4.12% of the total), from May 11, 2026 to January 29, 2027 — the largest in its history — with the shares to be retired. ADR: Citibank; 2 ADRs = 1 ordinary share, so the dividend per ADR is half (~¥35 → ~1% a year at the entry price).
Stock. Tokyo ¥7,185 on August 26, 2026; 52-week range ¥2,403–¥12,895; +197% this year; P/E ~50x; market value ¥13.08 trillion (~$81.6 billion). ADR $22.43 at the open; 52-week range $8.03–$38.72. The rally was triggered by MLCC demand for AI servers (+15.6% on the day of the July results); the ~40% drop from the June high was profit-taking after a ~400% run. Consensus: Strong Buy; average target ¥10,485 (StockAnalysis) / ¥11,494 (TradingView, 16 analysts).
Risks. (1) Valuation of ~50x earnings after a ~200% rally this year. (2) Greater China at 47% of sales and dependence on Chinese rare earths. (3) Smartphone/PC cycle and possible order pull-forward. (4) Yen: ¥4.5 billion of operating profit per yen. (5) Korean, Japanese and subsidized Chinese competition. (6) Precious-metal costs and logistics risk (Hormuz). Next results: October 30, 2026.
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This is not financial advice. Consult a certified financial advisor.
The author may hold positions in the securities discussed.
Past performance does not guarantee future results.