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Bridgestone Corp (BRDCY)
OTHER OTC:BRDCY
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Bridgestone
(OTC:BRDCY)
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Rating:71Outperform
Price Target:
$11.50
▼(-50.09% Downside)
Action:UpgradedDate:02/23/26
The score is driven primarily by solid financial performance (improving earnings and cash generation, manageable leverage trend despite higher 2025 debt) and a reasonable valuation (P/E ~14.4 with a ~2.46% yield). The earnings call supports a moderately positive view with modest FY2026 growth and strong shareholder returns, tempered by tariffs, regional weakness, and cost/headwind risks. Technical indicators are largely neutral, limiting the near-term momentum contribution.
Positive Factors
Improving cash generation
Material year-over-year cash flow improvement reflects stronger cash conversion and working-capital discipline. Sustained higher operating and free cash flow increases financial flexibility to fund R&D/CapEx, dividends and buybacks while cushioning cyclical downturns over the next 2–6 months.
Product pipeline & tech focus
A stepped-up product launch cadence and above-trend R&D/CapEx spending, coupled with a tech-centric executive structure, strengthen long-term competitiveness. These durable investments can improve mix, sustain premium pricing, and raise structural growth and margin potential over coming quarters.
Cost reductions & rebuilding progress
Realized cost savings and completed operational rebuilding reduce unit costs and improve factory efficiency. These structural gains support durable margin improvement and more consistent earnings as the company extracts permanent productivity benefits across regions.
Negative Factors
Persistent U.S. tariff headwind
A recurring tariff-driven profit drag is a structural, location-specific cost that management cannot fully neutralize via short-term actions. Over months this reduces competitiveness and forces either margin compression or ongoing offsetting investments, pressuring sustainable profitability.
Notable 2025 debt increase
The sharp debt increase weakens financial flexibility relative to recent years; while leverage remains manageable, higher absolute debt elevates refinancing and covenant risks and could constrain capital allocation (capex, buybacks) if demand softens in the medium term.
Margin compression & missed midterm targets
Persistent margin compression and missed midterm profitability targets indicate structural challenges in restoring historic returns. This implies the company must materially improve mix, pricing or cost structure to sustainably raise ROIC and meet shareholder return expectations over the coming quarters.
Bridgestone (BRDCY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$27.04B
Dividend Yield1.94%
Average Volume (3M)19.44K
Price to Earnings (P/E)9.1
Beta (1Y)0.37
Revenue Growth1.02%
EPS Growth-22.96%
CountryUS
Employees121,464
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.31
Shares Outstanding2,668,074,000
10 Day Avg. Volume0
30 Day Avg. Volume19,442
Financial Highlights & Ratios
PEG Ratio0.58
Price to Book (P/B)1.28
Price to Sales (P/S)1.01
P/FCF Ratio10.90
Enterprise Value/Market Cap160.12
Enterprise Value/Revenue0.97
Enterprise Value/Gross Profit2.51
Enterprise Value/Ebitda5.54
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.94
Revenue Forecast (FY)$29.21B
Bridgestone Business Overview & Revenue Model
Company DescriptionBridgestone Corporation, together with its subsidiaries, manufactures and sells tires and rubber products. It operates through two segments, Tires and Diversified Products. The company offers tires and tire tubes for passenger cars, trucks, buses, construction and mining vehicles, industrial machinery, agricultural machinery, aircraft, motorcycles, scooters, etc.; automotive parts; retreading materials and services; automotive maintenance and repair services; tire raw materials; and other tire-related products. It also provides vehicle parts, polyurethane foam and related products, electronic precision parts, industrial materials-related products, civil engineering and construction materials and equipment, and others; commercial roofing materials and other materials; golf balls, golf clubs, and other sporting goods; bicycles, bicycle-related goods, and others, as well as finance and other services. In addition, the company offers maintenance, IT/sensing technology, and other solutions for the mining, fleet, and agricultural sectors. It has operations in Japan, the United States, China, the Asia Pacific, Europe, Russia, the Middle East, Africa, Oceania, and internationally. The company was founded in 1931 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyBridgestone primarily makes money by manufacturing and selling tires to two main customer groups: (1) vehicle manufacturers (original equipment/OE), where tires are supplied for new vehicles, and (2) the replacement market, where consumers and commercial fleets purchase tires throughout a vehicle’s life. Revenue is generated through sales of tires across multiple categories (e.g., passenger, truck/bus, and specialty segments) and brands, with pricing and mix influenced by product performance tiers, raw-material costs, and regional demand. In addition to product sales, Bridgestone earns revenue from tire-related services and solutions, including distribution/retail activities and service offerings tied to maintenance and fleet needs (e.g., installation and other shop services), which can provide recurring customer interactions beyond the initial tire sale. The company’s earnings are also supported by its global manufacturing and supply footprint and its ability to serve both consumer and commercial customers across regions. Specific details on significant partnerships or named counterparties are null.
Bridgestone Earnings Call Summary
Earnings Call Date:Feb 16, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 18, 2026
Earnings Call Sentiment Positive
The call balanced clear signs of recovery and disciplined progress (FY2025 revenue and adjusted operating profit growth, notable cost-reduction effects, completed rebuilding initiatives, improving region-level margins, strengthened cash flow and a concrete FY2026 growth-with-quality plan) against persistent external headwinds (notably U.S. tariffs, inflation, Latin America weakness, raw-material volatility), one-time rebuilding costs (JPY 112.5 billion) and the need to restore longer-term MBP targets. Management presented an actionable roadmap (product launches, tech-focused executive reorganization, higher R&D/CapEx and targeted buybacks/dividends) and modest FY2026 growth guidance, indicating cautious optimism but with acknowledged risks that require execution.Q4-2025 Updates
Positive Updates
Consolidated Financial Performance (FY2025)
Revenue JPY 4,429.5 billion; adjusted operating profit JPY 493.7 billion, up 2% YoY (JPY +10.4 billion); profit attributable to owners JPY 327.3 billion, up 15% YoY (approx. JPY +42 billion). Adjusted OPM improved to 11.1% (+0.4 percentage points YoY) and ROIC improved to 8.3% (+0.2 points).
Business Cost Reductions and Rebuilding Progress
Business cost reduction initiatives generated ~JPY 72 billion of effects in FY2025; management states business rebuilding (Stage 2) for tire operations in U.S. and Europe was largely completed as planned, supporting improved profitability and business quality.
Cash Flow, Capital Returns and Balance Sheet Actions
Free cash flow was a JPY 45.5 billion inflow; operating cash inflow improved by JPY 141.7 billion YoY through tighter working capital. Company completed planned buybacks and cancelled acquired shares; announced FY2026 share buyback of JPY 150 billion (JPY 450 billion total FY2024–FY2026) and dividend increases (FY2025 dividend up JPY 20; FY2026 guidance: pre-split JPY 250 per share, up JPY 20).
Region-Level Margin Improvements
North America: sales down 3% but adjusted operating margin improved by 1.5 points to 11%, producing higher profits. Europe: adjusted operating margin reached 5.5%, up over 2 points YoY with profit growth. Asia/Oceania/India/China: revenue down 2% (currency and mix effects) but adjusted operating profit margin strong at 11.5% due to Thai rebuilding and India growth.
Product & Technology Initiatives to Drive Growth
FY2026 plan to launch >25 new passenger tire products globally (about double recent-year average) and >10 new truck & bus (TB) products. New executive structure to prioritize technology: 4 of 7 executive officers will be technical specialists (Chief Innovation Officer, Chief Product Officer, Chief Manufacturing Officer, West CTO). Management plans R&D and CapEx above the past two years to support product and manufacturing excellence.
FY2026 Financial Guidance
Guidance projects revenue JPY 4.5 trillion (+2% YoY), adjusted operating profit JPY 515 billion (+4% YoY), net profit JPY 340 billion, and adjusted OPM ~11.4% (+0.3 points YoY).
Negative Updates
U.S. Tariff Impact
U.S. tariffs reduced FY2025 profit by ~JPY 25 billion and are projected to reduce FY2026 profit by ~JPY 55 billion (longer duration/full-year effect), representing a significant recurring headwind that management cannot fully offset.
South America / Latin America Weakness
South America profits declined and the segment barely achieved breakeven in FY2025. Causes cited include expansion of low-end imports and lower conversion-cost efficiency from reduced exports to North America; Brazil remains a challenging market.
Missed Targets under 24MBP and Diversified Business Pressure
Company acknowledged revenue shortfall versus 24MBP FY2026 targets and failure to meet mid-term targets (13% adjusted OPM and 10% ROIC). Deterioration in the diversified products business and macro factors (tariffs, inflation, Latin America) contributed to the shortfall.
Product Segment Challenges & One-off Events
Passenger (PS) and light truck (LT) tires saw profit decline YoY despite premium-mix growth, attributed to a cyber incident in North America and Latin America struggles. Specialties profit declined due to lower agricultural (AG) sales and timing impacts from raw-material index adjustments on ultra-large ORR.
Rebuilding Costs and Adjustment Items
Adjustment items resulted in a loss of JPY 112.5 billion in FY2025, primarily business-rebuilding expenses across Europe, North America and Latin America. Management also expects operating expenses to rise (JPY 71 billion headwind cited for FY2026) driven by inflation and strategic investments for growth.
Raw Material and Currency Volatility
Natural rubber price spikes in FY2025 negatively affected results (material-related swing vs. FY2026); currency effects (e.g., yen appreciation and regional currency impacts) contributed to a 2% revenue decline in Asia/Oceania/India/China and created headwinds to margin recovery.
Company Guidance
Guidance for FY2026 calls for revenue of JPY 4.5 trillion, adjusted operating profit of JPY 515 billion (adjusted OPM 11.4%, +0.3 ppt YoY), and net profit of JPY 340 billion, while assuming a U.S. tariff drag of roughly JPY 55 billion; management plans higher R&D and CapEx (CapEx cited around JPY 410 billion and both R&D and CapEx “exceeding” the past two years) to support product launches (>25 new passenger-tire products and >10 new truck/bus products) and productivity programs (BCMA), expects to continue business-cost-reduction and rebuilding benefits after FY25 cost reductions of ~JPY 72 billion, and to pursue shareholder returns including a FY26 dividend of JPY 125 per share post–stock split (JPY 250 pre-split, +JPY 10 post-split) and a JPY 150 billion share buyback in FY26 (JPY 450 billion over FY24–26), while maintaining target cash reserves (~1.5 months of sales) and a midterm desired equity ratio around 55%.Bridgestone Financial Statement Overview
Summary
Solid overall fundamentals: steady 2023–2025 revenue growth and improved 2025 profitability and cash generation. Offsets include margin compression versus earlier years, historically volatile free cash flow, and a notable increase in total debt in 2025 that could reduce flexibility if the cycle weakens.Income Statement
Revenue has grown steadily from 2023–2025 (about 4.96% in 2023, 2.70% in 2024, and 5.19% in 2025), showing resilient demand. Profitability is positive and improving versus 2024 (net income rose to ~343B in 2025 from ~285B in 2024), but margins have clearly compressed compared with 2021 (when net profit margin was ~12.1% vs ~6.4% in 2024). Overall, earnings power looks solid for the cycle, but the business appears more margin-sensitive than it was a few years ago.74
Positive
Balance Sheet
Leverage looks manageable on the annual disclosures, with debt-to-equity improving from ~0.47 (2020) to ~0.20 (2024), and equity remaining sizable (about 3.66T in 2025). Returns on equity are positive in the recent years but have moderated versus the peak (about 14.98% in 2021 vs ~7.64% in 2024), suggesting less efficient profit generation on the capital base. A notable watch item is that total debt increased in 2025 (to ~1.10T from ~0.73T in 2024), which could pressure flexibility if profitability softens.70
Positive
Cash Flow
Cash generation is healthy and improving recently: operating cash flow increased to ~692B in 2025 from ~549B in 2024, and free cash flow jumped to ~429B in 2025 from ~212B in 2024 (about +12.19% growth shown for 2025). However, cash flow has been volatile over the cycle (notably weak free cash flow in 2022 at ~13.8B), indicating sensitivity to working capital and/or investment swings. Still, the latest year shows strong cash conversion and improved financial capacity.77
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.64T | 4.43T | 4.31T | 4.11T | 3.25T |
| Gross Profit | 1.66T | 1.73T | 1.65T | 1.59T | 1.32T |
| EBITDA | 875.92B | 819.30B | 828.30B | 736.66B | 645.30B |
| Net Income | 343.13B | 284.99B | 331.31B | 300.31B | 394.04B |
Balance Sheet | |||||
| Total Assets | 5.75T | 5.72T | 5.43T | 4.96T | 4.57T |
| Cash, Cash Equivalents and Short-Term Investments | 714.30B | 718.16B | 735.39B | 534.01B | 799.31B |
| Total Debt | 1.10T | 727.72B | 830.16B | 767.17B | 811.14B |
| Total Liabilities | 2.03T | 1.94T | 2.02T | 1.95T | 1.90T |
| Stockholders Equity | 3.66T | 3.73T | 3.35T | 2.97T | 2.63T |
Cash Flow | |||||
| Free Cash Flow | 429.20B | 211.55B | 318.50B | 13.76B | 96.55B |
| Operating Cash Flow | 692.46B | 548.84B | 661.43B | 268.48B | 281.54B |
| Investing Cash Flow | -235.87B | -255.06B | -297.72B | -338.00B | 131.70B |
| Financing Cash Flow | -450.74B | -343.26B | -183.66B | -364.11B | -379.32B |
Bridgestone Technical Analysis
Negative
23.04
Price Trends
11.63
Negative
11.52
Negative
11.21
Negative
Market Momentum
-0.29
Positive
35.35
Neutral
4.61
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BRDCY, the sentiment is Negative. The current price of 23.04 is above the 20-day moving average (MA) of 11.45, above the 50-day MA of 11.63, and above the 200-day MA of 11.21, indicating a bearish trend. The MACD of -0.29 indicates Positive momentum. The RSI at 35.35 is Neutral, neither overbought nor oversold. The STOCH value of 4.61 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BRDCY.
Bridgestone Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $5.79B | 14.06 | 8.79% | 2.63% | -1.90% | -13.86% | |
71 Outperform | $27.04B | 9.13 | 9.23% | 1.94% | 1.02% | -22.96% | |
69 Neutral | $7.69B | 12.37 | 29.57% | 2.60% | 0.84% | 26.17% | |
62 Neutral | $10.47B | 35.20 | 4.80% | 1.24% | 0.08% | -83.69% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $3.41B | 38.91 | -2.91% | 1.70% | -18.23% | ― | |
48 Neutral | $1.94B | -1.47 | -42.27% | ― | -3.87% | -482.29% |
* Consumer Cyclical Sector Average
BRDCY
Bridgestone
10.37
0.23
2.23%
ALV
Autoliv
103.78
16.60
19.04%
BWA
BorgWarner
51.81
23.86
85.37%
DAN
Dana Incorporated
31.83
17.65
124.52%
GT
GoodYear Tire
6.74
-2.42
-26.42%
LEA
Lear
116.15
23.32
25.13%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.