Obayashi (1802) AI Stock Analysis

• Market Cap: ¥1.62T
• Dividend Yield: 3.37%
• Average Volume (3M): 2.78M
• Price to Earnings (P/E): 13.2
• Beta (1Y): 0.67
• Revenue Growth: 11.60%
• EPS Growth: 79.43%
• Country: JP
• Employees: 16,986
• Sector: Industrials
• Sector Strength: 80
• Industry: Engineering & Construction
• EPS (TTM): 171.72
• Shares Outstanding: 721,509,640
• 10 Day Avg. Volume: 2,011,750
• 30 Day Avg. Volume: 2,784,226
• PEG Ratio: 0.17
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥2,489.55
• Price Target Upside: 10.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

Obayashi stands out with a solid financial foundation, characterized by revenue growth and stable profit margins. While the company presents a healthy balance sheet, challenges in cash flow management pose liquidity risks. The stock's technical indicators suggest a bearish trend, but its reasonable valuation, particularly its P/E ratio and attractive dividend yield, offers potential upside. The absence of recent earnings call data and corporate events leaves these aspects unassessed in the score.

Obayashi Business Overview & Revenue Model

Company Description

Obayashi Corporation engages in the construction business in Japan, North America, Asia, the Middle East, Europe, and Oceania. The company constructs buildings, including offices, condominiums, commercial facilities, factories, hospitals, and schools; and civil engineering projects, such as tunnels, bridges, dams, riverbanks, railroads, and expressways. It is also involved in the development and leasing of real estate properties in various locations, primarily in metropolitan areas, as well as property management activities; solar, biomass, hydropower, geothermal, and wind power generation business; and PPP and agriculture business. In addition, the company sells materials and equipment for construction; develops and sells computer software; sells and leases electronic equipment; offers finance-related services; and operates golf clubs. Further, it engages in the provision of urban development, contracted engineering, management, consultancy services, etc.; and is involved in the M&E design and construction activities. The company was founded in 1892 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Obayashi Corporation generates its revenue primarily through its construction and engineering services. The company takes on contracts for large-scale building and infrastructure projects, which include commercial and residential buildings, transportation systems, and industrial facilities. Revenue is earned through project contracts, which are often secured through competitive bidding processes. Additionally, Obayashi engages in real estate development, where it invests in, develops, and sells or leases properties, further contributing to its income. The company also forms strategic partnerships and joint ventures to expand its project portfolio and enhance its capabilities, which can lead to additional revenue streams.

Obayashi Financial Statement Overview

Summary

Obayashi demonstrates a strong financial position with growth in revenue and stable profit margins, indicative of operational efficiency and effective cost management. The balance sheet is robust with low leverage and a strong equity position, though asset optimization can be enhanced. However, the cash flow analysis is hindered by missing data, highlighting potential liquidity risks. Overall, the company is financially sound with opportunities for improvement in cash flow management.

Income Statement

The income statement shows a strong performance with a gross profit margin of 10.7% and a net profit margin of 4.9% for the TTM. The revenue growth rate from the previous year to the TTM period is approximately 7.7%, indicating positive growth. EBIT and EBITDA margins for TTM are 5% and 7.3%, respectively, reflecting stable operational efficiency. Although these margins are solid, there's room for improvement in net profitability.

Balance Sheet

The balance sheet reveals a debt-to-equity ratio of 0.39, which is manageable and indicates a conservative leverage position. The return on equity (ROE) is 10.8% for TTM, demonstrating decent profitability from equity financing. The equity ratio is 37.3%, suggesting a stable capital structure. Overall, the balance sheet is well-balanced with a healthy equity position, though there is potential for optimizing asset utilization.

Cash Flow

The cash flow statement for the TTM period lacks complete data, making it difficult to assess free cash flow growth and other cash flow ratios. Historically, the company has experienced fluctuations in operating and free cash flows, which presents a risk if not stabilized. The absence of operating cash flow in the latest period is a concern and suggests potential cash management challenges.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
2.33T	1.98T	1.92T	1.77T	2.07T
	Gross Profit
219.60B	216.57B	154.34B	225.78B	255.55B
	EBIT
79.38B	93.80B	41.05B	123.16B	152.87B
	EBITDA
138.49B	140.30B	78.61B	156.60B	184.32B
	Net Income Common Stockholders
75.06B	77.67B	39.13B	98.78B	113.09B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
347.62B	426.69B	271.03B	262.95B	322.13B
	Total Assets
3.02T	2.61T	2.42T	2.27T	2.23T
	Total Debt
332.90B	344.36B	280.87B	266.99B	249.83B
	Net Debt
-6.29B	-75.04B	15.83B	8.44B	-65.19B
	Total Liabilities
1.82T	1.57T	1.43T	1.31T	1.38T
	Stockholders Equity
1.15T	997.11B	955.69B	931.01B	817.89B
Cash Flow		Free Cash Flow
-27.99B	131.87B	11.67B	-32.63B	190.16B
	Operating Cash Flow
50.40B	228.46B	69.70B	24.80B	237.63B
	Investing Cash Flow
-84.47B	-101.61B	-49.83B	-79.08B	-47.32B
	Financing Cash Flow
-51.92B	22.12B	-12.46B	-8.48B	-49.40B

Obayashi Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2260.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1802, the sentiment is Positive. The current price of 2260 is above the 20-day moving average (MA) of 2103.95, above the 50-day MA of 2032.26, and above the 200-day MA of 1944.06, indicating a bullish trend. The MACD of 65.93 indicates Negative momentum. The RSI at 74.26 is Negative, neither overbought nor oversold. The STOCH value of 91.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1802.

Obayashi Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1802	64 Neutral	¥1.62T	13.16	10.95%	3.37%	11.60%	79.43%
Sector *	64 Neutral	$4.24B	11.64	5.23%	249.83%	4.07%	-10.54%
1820	57 Neutral	¥207.42B	15.80		4.19%	-4.62%	17.56%

Obayashi Corporate Events

Obayashi Corporation Revises Financial Forecasts Upward for FY 2025

Obayashi Corporation has revised its financial forecasts for the fiscal year ended March 31, 2025, showing an increase in net sales, operating income, and profit attributable to owners of the parent. The revisions are attributed to improved profitability in construction projects and better-than-expected progress in the sale of cross-shareholdings, impacting both domestic and international subsidiaries positively.

Obayashi Corporation Acquires Over 3 Million Own Shares

Obayashi Corporation announced the acquisition of 3,324,100 of its own common shares, amounting to approximately ¥6.73 billion, as part of a previously resolved plan to acquire up to 20 million shares. This strategic move is aimed at optimizing capital structure and potentially enhancing shareholder value, reflecting the company’s commitment to efficient capital management.

Obayashi Transfers Villa Site Management to Angel Forest Resorts

Obayashi Corporation has announced a company split agreement to transfer its villa site management business, including the hot spring water supply at the Obayashi Izu-Atagawa Villa Resort Sites, to Angel Forest Resorts Co., Ltd. This strategic move allows Obayashi to concentrate on its core business areas, while Angel Forest Resorts, which specializes in resort management and villa site operations, will take over the business to expand its presence in the Higashi-Izu area. The transfer is expected to have minimal financial impact on Obayashi’s overall assets and sales.