Halows Co., Ltd. (2742) AI Stock Analysis

• Market Cap: ¥92.54B
• Dividend Yield: 1.47%
• Average Volume (3M): 18.47K
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.51
• Revenue Growth: 7.75%
• EPS Growth: -1.68%
• Country: JP
• Employees: 1,305
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 107.32
• Shares Outstanding: 21,482,800
• 10 Day Avg. Volume: 14,120
• 30 Day Avg. Volume: 18,473
• PEG Ratio: 2.58
• Price to Book (P/B): 1.20
• Price to Sales (P/S): 0.40
• P/FCF Ratio: 21.86
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: ¥4,756.00 ▲(3.50% Upside)
• Action: Reiterated Date: 10/01/25
• Date: Action: Reiterated 10/01/25

Halows Co., Ltd. has a strong financial foundation with robust revenue growth and profitability. The technical analysis indicates some short-term weakness, but the stock is not oversold. The valuation is reasonable, offering a fair P/E ratio and a modest dividend yield. The absence of earnings call and corporate events data limits additional insights.

Positive Factors

Revenue & margins

Halows' consistent revenue growth and solid gross (25.64%) and net (4.23%) margins indicate durable consumer demand and disciplined cost management in its grocery operations. These fundamentals support recurring profitability, enable reinvestment in stores and supply chain, and provide resilience against modest sales swings over months.

Strong equity & low leverage

A high equity ratio (62.40% of assets) and a declining debt-to-equity (0.16) reflect conservative financing and a robust capital base. This enhances financial flexibility for strategic investments or downturns, reduces interest burden risk, and preserves capacity to fund store upgrades or measured expansion without compromising solvency.

Strong operating cash flow

Operating cash flow of ¥15.89bn and an OCF-to-net-income ratio of 1.78 show reliable cash generation from core retail operations. Durable OCF supports working capital, funds organic growth and routine store investments, and provides a buffer that helps the business sustain operations through seasonal or cyclical variability.

Negative Factors

Declining free cash flow

A significant fall in free cash flow driven by elevated capital spending reduces financial flexibility. Persistent high capex can constrain the company's ability to fund dividends, accelerate debt reduction, or pursue value-add initiatives, increasing funding and execution risk over the coming quarters.

Elevated liabilities exposure

Although debt-to-equity is low, the reported high total liabilities-to-equity ratio signals material operating liabilities or short-term obligations. Such liabilities can tighten liquidity windows, raise supplier or covenant risks, and limit maneuverability if cash generation weakens or market conditions worsen.

Limited investor disclosure

The absence of earnings call data and notable corporate events reduces transparency into strategic priorities and operational execution. Limited investor communication makes it harder to assess management's responses to market changes and increases uncertainty about the durability of planned initiatives over the medium term.

Halows Co., Ltd. Business Overview & Revenue Model

Company Description

Halows Co.,Ltd. operates a network of supermarket stores in Hiroshima, Okayama, Kagawa, Ehime, Tokushima, and Hyogo of Japan. The company was formerly known as Fuchu Supermarket Co., Ltd. and changed its name to Halows Co.,Ltd. in March 1988. Halows Co.,Ltd. was incorporated in 1958 and is headquartered in Tsukubo, Japan.

How the Company Makes Money

Halows makes money mainly through retail sales to end customers in its physical stores. Its core revenue stream is the sale of food products (including fresh foods such as produce, meat, and seafood, as well as packaged foods) and non-food daily necessities (e.g., household goods and consumables). Revenue is generated at the point of sale, with profitability driven by the spread between retail prices and the company’s costs of goods sold (procurement from manufacturers, wholesalers, and other suppliers), as well as store-level operating efficiency (labor, logistics, and store operating costs). Specific details on additional revenue streams (e.g., private-label income breakdown, tenant/leasing income, e-commerce, loyalty/financial services, or named strategic partnerships) are null.

Halows Co., Ltd. Financial Statement Overview

Summary

Halows Co., Ltd. demonstrates strong revenue growth and profitability with effective cost management. The company has a solid equity base and conservative leverage, though there are challenges in managing capital expenditures affecting free cash flow.

Income Statement

Halows Co., Ltd. has demonstrated strong revenue growth, with a consistent increase in total revenue over the past years, culminating in a 7.86% growth from 2024 to 2025. The company maintains a healthy gross profit margin of 25.64% and a net profit margin of 4.23% in 2025, indicating effective cost management and profitability. EBIT and EBITDA margins are also solid at 5.82% and 7.94%, respectively, showing operational efficiency. Overall, the income statement reflects a robust growth trajectory and profitability.

Balance Sheet

The balance sheet of Halows Co., Ltd. reveals a strong equity base with a rising stockholders' equity, reaching 62.40% of total assets in 2025, which enhances financial stability. The debt-to-equity ratio has been decreasing over the years, currently at 0.16, which signifies a conservative leverage approach. Return on equity is at 12.65%, indicating good returns for shareholders. However, the high total liabilities to equity ratio still suggests some level of financial risk, albeit well-managed.

Cash Flow

The cash flow statement shows a positive trend in operating cash flow, which increased to ¥15.89 billion in 2025, supporting business operations and growth. However, free cash flow decreased significantly due to a high capital expenditure, impacting the free cash flow to net income ratio. The operating cash flow to net income ratio is favorable at 1.78, reflecting strong cash generation from operations. Despite healthy operational cash flows, the decline in free cash flow suggests potential challenges in managing capital investments effectively.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	219.01B	210.75B	195.44B	174.11B	163.37B	151.94B
Gross Profit	55.57B	54.03B	50.09B	44.31B	40.87B	38.11B
EBITDA	17.07B	17.11B	15.54B	13.14B	12.61B	11.21B
Net Income	9.00B	8.91B	8.59B	6.20B	5.93B	5.50B
Balance Sheet
Total Assets	132.75B	114.01B	104.79B	99.52B	87.64B	91.21B
Cash, Cash Equivalents and Short-Term Investments	28.27B	15.03B	18.14B	17.84B	14.66B	23.25B
Total Debt	11.30B	11.13B	15.14B	19.44B	14.09B	16.89B
Total Liabilities	59.27B	43.58B	42.27B	44.71B	38.23B	46.99B
Stockholders Equity	73.48B	70.43B	62.51B	54.81B	49.40B	44.22B
Cash Flow
Free Cash Flow	0.00	3.88B	6.35B	-176.00M	-4.33B	5.20B
Operating Cash Flow	0.00	15.89B	13.15B	10.62B	3.28B	11.59B
Investing Cash Flow	0.00	-13.76B	-7.25B	-11.52B	-7.82B	-7.56B
Financing Cash Flow	0.00	-5.25B	-5.60B	4.08B	-4.05B	4.68B

Halows Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4595.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2742, the sentiment is Negative. The current price of 4595 is above the 20-day moving average (MA) of 4580.94, below the 50-day MA of 4615.43, and below the 200-day MA of 4720.66, indicating a bearish trend. The MACD of -106.51 indicates Positive momentum. The RSI at 34.01 is Neutral, neither overbought nor oversold. The STOCH value of 16.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:2742.

Halows Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8198	78 Outperform	¥114.24B	16.52	―	1.92%	2.30%	26.52%
9974	76 Outperform	¥157.13B	15.86	―	1.64%	10.13%	23.77%
2742	72 Outperform	¥92.54B	10.82	―	1.47%	7.75%	-1.68%
8194	72 Outperform	¥217.94B	15.19	―	2.43%	4.48%	13.17%
9823	71 Outperform	¥75.57B	11.40	―	1.34%	20.50%	10.77%
7596	66 Neutral	¥32.03B	14.62	―	2.22%	7.94%	-8.55%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Halows Co., Ltd. Corporate Events

Halows Reports Change in Major Shareholding With No Expected Impact

Halows Co., Ltd. disclosed a change in its shareholder structure based on the filing of a Large Shareholding Report (Change Report) dated February 27, 2026. The company stated that the impact of this change on its future outlook is negligible and that there are no particular matters to report for stakeholders regarding operations or strategy at this time.

The most recent analyst rating on (JP:2742) stock is a Buy with a Yen4928.00 price target. To see the full list of analyst forecasts on Halows Co., Ltd. stock, see the JP:2742 Stock Forecast page.

Halows Restructures Director Duties to Strengthen Administrative Governance

Halows Co., Ltd. announced a change in the duties of Director Hidenori Hanaoka following a Board of Directors resolution on January 15, 2026. Hanaoka, previously Senior Managing Director and General Manager of Administrative Groups with responsibility for business continuity planning (BCP), has additionally been appointed General Manager of the General Affairs Division, consolidating key administrative and BCP oversight under his remit, which may streamline internal management and strengthen the company’s operational governance framework.

The most recent analyst rating on (JP:2742) stock is a Hold with a Yen4832.00 price target. To see the full list of analyst forecasts on Halows Co., Ltd. stock, see the JP:2742 Stock Forecast page.

Halows Posts Higher Nine-Month Revenue and Profit, Affirms FY2026 Outlook and Higher Dividend

Halows reported non-consolidated results for the nine months ended November 30, 2025, with operating revenue rising 7.5% year on year to ¥167.4 billion and profit increasing 7.2% to ¥6.4 billion, while operating and ordinary profit grew modestly. Total assets expanded to ¥130.9 billion and equity to ¥74.9 billion, although the equity-to-asset ratio declined to 57.2% as the company continued to invest and grow its balance sheet. The retailer confirmed its full-year forecast for the fiscal year ending February 28, 2026, targeting 6.4% growth in operating revenue to ¥224.2 billion and broadly flat operating profit of ¥12.3 billion, with profit expected to dip 3.6%, and it maintained its dividend plan of ¥68 per share for the year, up from the prior year’s total, signaling a continued emphasis on shareholder returns alongside steady top-line expansion.

The most recent analyst rating on (JP:2742) stock is a Buy with a Yen5506.00 price target. To see the full list of analyst forecasts on Halows Co., Ltd. stock, see the JP:2742 Stock Forecast page.