Panasonic HD (6752) market trends | Will it really recover in the fiscal year ending March 2027 due to the intense heat and structural reforms?

[Summary]

Panasonic Holdings (6752) had quite heavy financial results when looking only at the fiscal year ending March 2026.

Sales were 8.05 trillion yen, down 4.8% from the previous fiscal year, operating income was 236.4 billion yen, down 44.6%, and net income attributable to owners of the parent company was 209 billion yen, down 45.6%.

It looks weak.

However, the company's forecasts for the fiscal year ending March 2027 will quickly return. Sales of 7.6 trillion yen, operating income of 550 billion yen, and net income of 420 billion yen. The plan is for operating income to increase by 132.7% and net income to increase by 101.0% from the previous fiscal year.

This is what the market is looking at.

Will the profits that have fallen due to structural reform costs really return to normal profits?

Furthermore, if the summer of 2026 becomes hot, there will be a tailwind for air conditioners, refrigerators, freezers, and commercial air conditioners. The Japan Meteorological Agency's three-month forecast also shows that temperatures are expected to rise nationwide from June to August 2026.

However, it would be rough to explain Panasonic HD's stock price solely by the intense heat. Home appliances have a short-term tailwind. The main value of the stock price is automotive batteries, power supplies for AI data centers, HVAC, and profit margins after structural reforms.

First, look at the numbers coldly

Comparing the company forecasts for the fiscal year ending March 2026 and March 2027, it looks like this.

Sales are expected to decline.

However, profits will return significantly. This is the most important point when looking at Panasonic HD's fiscal year ending March 2027.

The company recorded significant business restructuring costs in the fiscal year ending March 2026. In the fiscal year ending March 2027, we aim to recover profits by reducing fixed costs, reorganizing the portfolio, and expanding growth areas.

However, the market has read that far ahead.

As of May 22, 2026, the stock price has risen to the 3,500 yen level, and expectations for low PBR revisions and structural reforms have been factored in to a large extent. There is also data that the average analyst price target is between 3,200 yen and 3,300 yen, so this is not a simple situation where there is room for the stock to rise to the target price.

The numbers are strong. The problem is that stock prices are already ahead of the rest.

The new structure has shifted a little from being a “home appliance company”

From April 2026, the Panasonic Group has transitioned to a new system.

Panasonic HD is strengthening its character as a holding company focused on investments, group strategy, and business support. The company that actually earns money is its affiliated business company.

Roughly divided, they are as follows.

If you just look at the company as a ``home appliance manufacturer'' like in the past, you'll be misreading it quite a bit.

Of course, home appliance brands are strong. Air conditioners, refrigerators, washing machines, cooking appliances, etc. are still sources of income close to consumers.

But that's not the only focus when the stock market looks at Panasonic HD right now.

Automotive batteries, power supplies for AI infrastructure, HVAC, electrical equipment materials, and structural reform. Rather, this area has explanatory power for stock prices.

Recovery scenario for fiscal year ending March 2027

Based on company forecasts, there is a fairly strong recovery plan for the fiscal year ending March 2027.

Operating income of 550 billion yen is more than double the previous fiscal year's 236.4 billion yen.

So why should I return it?

There are three main factors.

1. Rebound from structural reform costs

In the fiscal year ending March 2026, structural reform costs and impairment losses pushed down profits.

Once these one-time costs disappear, profits tend to return to normal.

However, the market knows this. An increase in reaction alone is unlikely to be a surprise.

2. Returning the car battery

Panasonic Energy is strongly affected by the North American EV market and subsidies.

There are many materials, including 4680 batteries at the Nevada, Kansas, and Wakayama factories.

However, it is no longer possible to buy EV batteries just by dreaming. Slowdown in EV demand, customer concentration, raw material prices, subsidy system, start-up costs. As good as the story is, there's a lot to check.

The market still doesn't fully trust this.

3. AI infrastructure and power supply

With the spread of generative AI, demand for power supplies, storage, and cooling for data centers is a strong theme.

Panasonic HD has identified AI servers, power systems for data centers, and energy storage as growth areas.

This is a story I like about the stock market.

However, expectations tend to be high for AI infrastructure-related products. Even if sales increase, how much will profits fall for which operating company? If you can't see that, you might be able to buy it as a theme stock, but it's a little difficult to evaluate it over the long term.

The heatwave is a tailwind for home appliances and HVAC

Temperatures in the summer of 2026 will be a short-term factor for Panasonic.

According to the Japan Meteorological Agency's three-month forecast, temperatures are expected to be high nationwide from June to August 2026. Western Japan, Okinawa and Amami also show very high prospects.

As the hot summer approaches, the following demands are likely to emerge in the home appliance market:

Air conditioners are especially easy to understand.

As the weather gets hotter, demand at electronics stores increases rapidly. Demand for replacing old air conditioners, installing additional units in children's rooms and bedrooms, and replacing rental housing. This is likely to be effective for sales from the first quarter to the second quarter.

However, there are limits to extreme heat demand.

Selling the air conditioner unit is not the end. If the installation work is delayed, you will not be able to deliver the product even if you want to sell it. In extremely hot years, inventory, delivery, and construction personnel become bottlenecks.

This is where we compete with Daikin, Mitsubishi Electric, Hitachi, Fujitsu General, and electronics retailers.

Panasonic's strengths are its brand power and sales network. Possible weaknesses include mobility during extreme heat and the sales ratio of high value-added models.

Will the intense heat push up profit margins?

Increasing the sales volume of home appliances and increasing profit margins are two different things.

This is where I want to look a little cooler.

When it gets hot, the quantity increases. However, discount competition also occurs at mass retailers. If low-priced air conditioners work, sales will increase, but profit margins will not increase as much as expected.

What is really good for Panasonic HD is the following sales methods.

• Higher-end models with high energy-saving performance will sell better
• Value-added models such as air purification, dehumidification, and AI control will sell well
• Commercial air conditioners and refrigeration equipment will receive replacement demand
• Smooth installation work
• Can be sold without too much discount

In other words, the intense heat is a tailwind.

However, extreme heat alone is not the answer to profitability.

What investors should look at is the profit margins of ``Lifestyle'', ``HVAC'', and ``China/Northeast Asia'' after the summer trading season. Even if sales increase, if there are no profits left, the market's reputation will not last long.

How to read stock prices

Panasonic HD's stock price has already begun to factor in structural reforms and recovery in the fiscal year ending March 2027.

Therefore, the stock price information from here is not simple.

The conditions for a bullish view are as follows.

• Operating profit of 550 billion yen for the fiscal year ending March 2027 becomes more realistic
• Automotive battery profits will improve more than expected
• Kansas factory start-up is progressing smoothly
• Visualize sales and profits related to AI infrastructure in numbers
• HVAC turns heatwave demand into profit
• Fixed cost reductions after structural reforms can be confirmed on a quarterly basis

On the other hand, the conditions for viewing it as weak are also clear.

• Profit recovery appears to be temporary amid declining sales
• There are concerns about demand, subsidies, and operating rates for EV batteries.
• AI infrastructure is a leading theme, making little contribution to profits
• Home appliance profit margin does not increase even in the heatwave
• The stock price rises too much first, leading to profit-taking selling due to good news

Personally, I think Panasonic HD has moved from ``a phase of picking up cheap large-cap stocks'' to ``a phase of seeing the quality of recovery.''

The company's forecast for operating income of 550 billion yen is strong.

However, stock prices are also looking at this. From here, it's time to check which businesses earned how much money in 1Q and 2Q.

Checkpoints that investors should look at

You can narrow down the points you should look at in your next financial results.

• Progress towards operating profit plan of 550 billion yen
• In-vehicle battery utilization rate, subsidies, and trends by customer *Sales and profits related to power supplies and storage for AI infrastructure *Profit margin of summer sales season for HVAC and home appliances
• Does air conditioner sales involve not only quantity but also the ratio of top models?
• Will operating CF be strong even after structural reform? *Additional materials for shareholder return and capital efficiency improvement

If you look at it in relation to the intense heat, it's more about the profit margin than the number of units sold.

And ultimately, rather than profit margins, it's about cash.

Panasonic HD is a huge company, so a short-term special demand for air conditioners alone won't change everything. The summer sales season is the gateway. The main question is whether the profit structure has really changed in the fiscal year ending March 2027.

Summary

Panasonic HD plans to decline significantly in the fiscal year ending March 2026, and then make a major comeback in the fiscal year ending March 2027.

If you just look at the numbers, operating income of 550 billion yen and net income of 420 billion yen are quite strong.

However, stock prices are already starting to price in the recovery.

From this point on, it will not be enough to simply have an increase in reaction to structural reforms.

Summer sales season for automotive batteries, AI infrastructure, HVAC, and home appliances. You can see how these four fall into actual profits and cash.

The intense heat is a short-term tailwind. Effective for air conditioners, refrigerators, freezers, and commercial air conditioners.

However, Panasonic HD is too big to talk about its stock price based solely on the intense heat.

In the fiscal year ending March 2027, it's not so much whether we can sell due to the heat, but rather how much profit will remain after we sell. That's the situation I want to see.

Source/Reference materials

• [Panasonic HD “FY2025 Financial Results [IFRS] (Consolidated)” May 12, 2026](https://news.panasonic.com/uploads/tmg_block_page_image/file/38977/en260512-10-1.pdf)
• Panasonic HD “FY2025 Full Year Consolidated Financial Summary” May 12, 2026
• Panasonic Group Company Information
• Japan Meteorological Agency “Weather forecast for the next three months”
• IR BANK: Panasonic Holdings 6752