Why is Mitsubishi Heavy Industries stock surging today?

Mitsubishi Heavy Industries stock surged 5.2% to reach ¥3,065 as investors staged a decisive reassessment of the company’s first-half FY2026 results, which were released on November 6 but initially overshadowed by a historic broad market selloff.

The company reported first-half revenue of ¥2.52 trillion, up 19.4% year-on-year, with business profit climbing 45.3% to ¥249.3 billion and net profit attributable surging 76.9% to ¥203.3 billion. The company also raised its full-year net profit forecast by 16%, further extending what was already a record-high profit outlook.

A key supporting factor amplifying today’s buying is the formal commencement of MHI’s inaugural share repurchase program. The company announced plans to buy back up to 120 million shares, or 3.6% of its outstanding stock, for up to ¥300 billion between November 9, 2026, and November 8, 2027 - meaning the buyback begins precisely today, providing direct price support.

MHI also raised its full-year order target by ¥600 billion to ¥3.0 trillion, a 13% increase year-over-year, following strong demand in the second quarter, including nine new large gas turbine combined cycle orders totaling 4 gigawatts, and lifted its nuclear order target to ¥600 billion. Analyst sentiment remains firmly constructive, with the consensus sitting at a strong buy and an average price target of approximately ¥5,400.

The broader Tokyo market provided a powerful tailwind. The Nikkei Stock Average rebounded sharply today, with gains briefly exceeding 1,700 points, recovering from a plunge of more than 3,600 points on November 6 - the index’s third-largest point drop on record - as oversold-driven buybacks took hold, further supported by gains in AI and semiconductor stocks in the U.S. market.

Japanese financial media specifically identified MHI as the standout leader of the day’s recovery, citing the combination of record profit guidance, the share buyback, and a large-scale investment plan as the "three pillars" driving renewed buying interest.

Taken together, the confluence of delayed earnings recognition, the technical support of an active buyback commencing today, a strongly bullish analyst community, and a broad Nikkei recovery created the conditions for today’s sharp rebound.

The stock’s current level of ¥3,065 remains well below its 52-week high of ¥5,208, underscoring the significant gap between the current price and where analysts believe fair value lies.