Anritsu (6754) Report Interpretation

Overview

This earnings read-across uses Keysight’s fiscal third-quarter results to support Goldman Sachs’ existing positive view on Anritsu. The central conclusion is that accelerating AI data-center optical testing and the transition toward funded 6G development could converge as growth drivers for Anritsu in the second half of 2027.

Core views

Goldman Sachs argues that Keysight’s fiscal third-quarter results provide a constructive external read-across for Anritsu’s Test and Measurement business. Keysight reported company-wide sales of US$1,846 million, 31% organic growth year-on-year and above the US$1,746 million consensus. Operating profit was US$613 million versus US$494 million consensus, while the 33.2% operating margin expanded 820 basis points year-on-year. Orders reached US$2,091 million, up 52% organically year-on-year and above US$1,858 million consensus. The report highlights that orders have exceeded US$2 billion for two straight quarters and are expected to remain at that level through the fourth quarter, partly seasonally, indicating continued pipeline momentum. The most relevant segment was Keysight’s commercial-communications business, which sells test equipment for data centers and mobile communications. Revenue was US$1,006 million, up 56% year-on-year and above the US$889 million consensus. Data-center-related wireline sales surpassed mobile-related wireless sales for the first time, with AI demand contributing strongly and year-to-date data-center performance also ahead of plan. The report further notes rising demand for test equipment for 1.6T optical transceivers while 800G remains mainstream, as well as initial customer discussions around 3.2T products. Goldman Sachs views these developments as supportive of future optical test-equipment demand relevant to Anritsu. On 6G, Keysight indicated that some customers are moving from basic research into budgeted, full-scale development programs ahead of an initial industry-standardization date of March 2029. Keysight expects the 6G opportunity to exceed that of 5G because AI-RAN, integrated sensing and communication, and non-terrestrial networks add new technology requirements. Goldman Sachs believes this directional outlook is consistent with Anritsu’s prospects and expects Anritsu to enter a period of significant earnings growth as optical test equipment and 6G demand begin to overlap in 2H 2027. The report maintains a Buy rating and a 12-month ¥5,400 target price. The target is based on a 17x FY3/28E EV/EBITDA multiple, selected from the relationship between EV/EBITDA and EBITDA margins among global competitors. Goldman Sachs’ forecasts show revenue rising from ¥117.5 billion in FY3/26 to ¥137.2 billion in FY3/27E, ¥156.1 billion in FY3/28E and ¥173.4 billion in FY3/29E, while operating profit rises from ¥14.8 billion to ¥21.8 billion, ¥28.9 billion and ¥35.3 billion, respectively.

Analysis framework

Goldman Sachs uses Keysight’s reported results and management commentary as a read-across for overlapping test-equipment markets served by Anritsu. It links data-center optical-transceiver demand and 6G development activity to Anritsu’s potential earnings trajectory, then values Anritsu using a peer-informed EV/EBITDA multiple applied to FY3/28E estimates.

Methodology notes

• Valuation methodsEV/EBITDA valuation

  A 17x target EV/EBITDA multiple on FY3/28E

  The report derives its ¥5,400 target price by applying a target enterprise-value-to-EBITDA multiple to projected FY3/28 EBITDA, with the multiple informed by the observed relationship between valuation and EBITDA margin among global competitors.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Keysight earnings read-across to Anritsu

  The report treats strong demand for data-center and communications test equipment at Keysight as evidence supporting demand conditions in overlapping markets relevant to Anritsu.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Anritsu (6754.T)

  Primary covered company expected to benefit from overlapping optical test-equipment and 6G demand.

  Strengths

  Goldman Sachs expects significant earnings growth as the two demand drivers converge in 2H 2027.

  Weaknesses

  Demand exposure spans markets with differing conditions, including 5G applications, data centers, battery testing and overseas expansion.

  Comparison

  Keysight’s strong commercial-communications results are used as a positive read-across for overlapping optical-test-equipment and 6G demand.

  Risks

  Slower-than-expected demand, weaker margins, changes in testing practices, weaker battery-test demand, investment-return disappointments, higher R&D intensity and yen appreciation.

• Keysight Technologies

  Comparable read-across company whose results provide evidence on demand in overlapping test-equipment markets.

  Strengths

  Commercial-communications sales grew 56% year-on-year, with AI-related data-center demand and rising 1.6T optical-transceiver testing demand.

  Weaknesses

  Customer decisions and data-center demand could be affected by uncertainty related to US tariffs.

  Comparison

  Its outlook is described as generally consistent with Anritsu’s, particularly for optical testing and 6G.

Key data

• Keysight 3Q company-wide salesUS$1,846 million31% organic growth year-on-year; versus US$1,746 million consensus.
• Keysight 3Q operating profitUS$613 millionVersus US$494 million consensus; operating margin was 33.2%, up 820 basis points year-on-year.
• Keysight 3Q ordersUS$2,091 million52% organic growth year-on-year; versus US$1,858 million consensus.
• Keysight commercial-communications salesUS$1,006 millionUp 56% year-on-year; versus US$889 million consensus.
• Anritsu FY3/28E revenue and operating profit¥156.1 billion revenue; ¥28.9 billion operating profitGoldman Sachs forecast, following FY3/27E revenue of ¥137.2 billion and operating profit of ¥21.8 billion.
• Anritsu target price¥5,40012-month target based on 17x FY3/28E EV/EBITDA.

Impact & implications

The report says that AI-led data-center investment is already strengthening demand for higher-speed optical-test equipment, while 6G customers are beginning to move into funded development. Goldman Sachs views the potential overlap of these demand cycles in 2H 2027 as the basis for significant earnings growth at Anritsu.

Risks

• Demand for 5G applications may remain weak, causing Test and Measurement sales to miss expectations and margins to deteriorate.
• US tariff uncertainty could delay data-center customer decisions and lead to stagnant or weaker demand.
• Testing may shift from 100% testing toward sampling testing.
• PQA could lose domestic market share or fail to expand as expected in North America, Europe and China.
• Battery test-equipment earnings could disappoint if the BEV market slows.
• M&A or growth investments may generate disappointing returns, R&D intensity may rise, and yen appreciation could weigh on results.

What to watch

• Whether demand for 1.6T optical-transceiver testing continues to rise and discussions around 3.2T products develop.
• The pace at which 6G customers move from research into budgeted development programs ahead of March 2029 standardization.
• Whether AI-related data-center testing demand remains strong and supports order levels.
• The timing of an overlap between optical test-equipment and 6G demand, which Goldman Sachs expects in 2H 2027.