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Sekisui House
(1928)
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Rating:69Neutral
Price Target:
¥3,673.00
▲(3.87% Upside)
Action:Reiterated
Date:08/06/26
The score is driven primarily by mixed financial performance—solid profitability but a steep FY2026 revenue decline, higher leverage, and uneven cash-flow conversion—partly offset by clearly attractive valuation (low P/E and strong dividend yield). Technicals are weak to neutral, with the stock below its 20-day average and subdued momentum indicators.
Positive Factors
Sustained Profitability and Margins
Gross margins (~19–20%) and operating margins (~8–10%) indicate durable pricing power and efficient project execution in homebuilding and development. Sustained margin levels help absorb cyclical volume shocks, fund reinvestment, and support long-term cash generation and shareholder returns.
Negative Factors
Sharp FY2026 Revenue Drop
A one-year top-line fall of -40.2% is a material structural shock that can depress margins, reduce backlog visibility, and lead to underutilized capacity. Such a large decline increases uncertainty around forward earnings, project timing, and the pace of revenue recovery over multiple quarters.
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Positive Factors
Negative Factors
Sustained Profitability and Margins
Gross margins (~19–20%) and operating margins (~8–10%) indicate durable pricing power and efficient project execution in homebuilding and development. Sustained margin levels help absorb cyclical volume shocks, fund reinvestment, and support long-term cash generation and shareholder returns.
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Sekisui House (1928) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥2.24T
Dividend Yield4.13%
Average Volume (3M)1.95M
Price to Earnings (P/E)8.8
Beta (1Y)0.84
Revenue Growth0.89%
EPS Growth28.16%
CountryJP
Employees32,186
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)396.79
Shares Outstanding651,585,600
10 Day Avg. Volume1,960,440
30 Day Avg. Volume1,950,790
Financial Highlights & Ratios
PEG Ratio1.46
Price to Book (P/B)1.04
Price to Sales (P/S)0.53
P/FCF Ratio14.92
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥3,660.00Price Target Upside3.51% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)337.83
Revenue Forecast (FY)¥4.29T
Sekisui House Business Overview & Revenue Model
Company Description
Sekisui House, Ltd. is a prominent Japanese construction and real estate firm that specializes in the design, construction, and contracting of custom-built detached residences. Their operations extend beyond Japan, encompassing various internation...
How the Company Makes Money
Sekisui House primarily generates revenue by (1) selling newly built homes (e.g., detached houses) to individual customers and (2) developing and delivering residential buildings—particularly rental housing—where revenue is recognized from constru...
Sekisui House Earnings Call Summary
Earnings Call Date:Jun 04, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Sep 10, 2026
Earnings Call Sentiment Neutral
The quarter shows a mix of clear strengths (record Q1 revenue from the MDC acquisition, solid domestic detached and rental management performance, high occupancy and strong ZEH adoption) but also material near-term challenges (notably the US single-family delivery and margin shortfall, lower consolidated profits, negative operating/free cash flow and higher interest-bearing debt). Management has identified causes (lower backlog entering the year, increased incentives/rate buydowns, goodwill/amortization impacts) and signaled mitigations (incentive/price strategy adjustments, asset sales and operational integration), but uncertainty remains on the pace of recovery in the US. Overall, the call balances meaningful growth drivers against significant profitability and cash-flow headwinds.Positive Updates
Record Q1 Revenue Driven by MDC Acquisition
Consolidated net sales increased by ¥1,169億 to ¥8,940億 (Q1 record), with international sales rising ¥1,397億 to ¥2,576億 largely due to the MDC acquisition.
Negative Updates
US Single-Family Business: Delivery and Margin Shortfall
MDC deliveries fell from 2,395 to 1,785 (-610 units, -25.5%). MDC operating profit declined (gross margin roughly -3 percentage points; operating margin down ~4.1pp). Q1 single-family operating profit fell dramatically (MDC contribution near ¥3億), and management noted ~70% of incentive actions used are rate buydowns.
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Q1-2026 Updates
Positive
Negative
Record Q1 Revenue Driven by MDC Acquisition
Consolidated net sales increased by ¥1,169億 to ¥8,940億 (Q1 record), with international sales rising ¥1,397億 to ¥2,576億 largely due to the MDC acquisition.
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Company Guidance
Management kept full‑year targets under review but flagged the U.S. single‑family business as the main risk and outlined concrete targets and assumptions: the group still aims for ~15,000 U.S. home deliveries/受注 this year (2,769 delivered in Q1, backlog+着工済み ≈11,000), noting MDC deliveries fell from 2,395 to 1,785 (‑610, ‑25.5%), about 70% of current offerings have rate buy‑downs (which reduced MDC gross margin by ~3pp and OP rate by ~4.1pp), and MDC’s reported SF operating profit was ¥3bn (¥115bn excluding goodwill/amortization impacts); goodwill and trademark amortization run ~¥170–180bn p.a. (~¥45bn/qtr) and acquisition‑related inventory COGS recognition is expected ~¥150–160bn this year (Q1 ≈¥46bn; total allocation from the acquisition ≈¥500bn, ~¥250bn recognized last year). Management said City Ridge tower sales to the REIT will contribute in Q2, other multi‑family disposals are targeted mainly in Q4, Australian backlog will be recognized mainly in Q2–Q3, and they are preparing additional domestic urban‑development disposals from a pool of sellable assets of roughly ¥300bn (≈¥3,000億) while planning a formal review at the normal September update.Sekisui House Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
70
Positive
Cash Flow
56
Neutral
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.21T | 4.20T | 4.06T | 3.11T | 2.93T | 2.59T |
| Gross Profit | 860.01B | 839.82B | 785.99B | 623.75B | 584.30B | 528.88B |
| EBITDA | 465.50B | 420.68B | 388.40B | 332.82B | 303.28B | 263.67B |
| Net Income | 257.20B | 232.09B | 217.71B | 202.33B | 184.52B | 153.91B |
Balance Sheet | ||||||
| Total Assets | 4.96T | 5.01T | 4.81T | 3.35T | 3.01T | 2.80T |
| Cash, Cash Equivalents and Short-Term Investments | 296.16B | 435.18B | 390.56B | 293.15B | 332.90B | 515.28B |
| Total Debt | 1.87T | 1.85T | 1.90T | 774.96B | 607.20B | 549.86B |
| Total Liabilities | 2.75T | 2.82T | 2.79T | 1.56T | 1.34T | 1.28T |
| Stockholders Equity | 2.16T | 2.14T | 1.96T | 1.75T | 1.63T | 1.47T |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 149.40B | -13.81B | -61.25B | 33.30B | 35.08B |
| Operating Cash Flow | 0.00 | 216.32B | 62.88B | 15.68B | 125.46B | 118.03B |
| Investing Cash Flow | 0.00 | -73.17B | -697.69B | -69.12B | -165.41B | -113.71B |
| Financing Cash Flow | 0.00 | -93.25B | 720.97B | 6.48B | -155.78B | -111.70B |
Sekisui House Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | ¥2.24T | 8.79 | 12.68% | 3.96% | 0.89% | 28.16% | |
63 Neutral | ¥735.76B | 13.58 | 10.23% | 2.92% | 8.14% | 64.67% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | ¥831.73B | 7.99 | 10.76% | 3.21% | 8.35% | -9.58% | |
59 Neutral | ¥627.93B | 9.99 | 6.36% | 4.37% | 3.37% | 26.48% | |
54 Neutral | ¥102.15B | 9.77 | ― | 4.20% | 15.51% | 1.53% | |
53 Neutral | ¥89.09B | 72.66 | ― | 4.17% | -1.53% | -17.93% |
* Consumer Cyclical Sector Average
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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.