Japan Tobacco (2914) AI Stock Analysis

• Market Cap: $7.81T
• Dividend Yield: 4.37%
• Average Volume (3M): 4.44M
• Price to Earnings (P/E): 43.5
• Beta (1Y): 0.54
• Revenue Growth: 10.98%
• EPS Growth: -63.74%
• Country: JP
• Employees: 53,593
• Sector: Consumer Defensive
• Sector Strength: 63
• Industry: Tobacco
• EPS (TTM): 88.69
• Shares Outstanding: 2,000,000,000
• 10 Day Avg. Volume: 4,337,210
• 30 Day Avg. Volume: 4,437,096
• PEG Ratio: 1.50
• Price to Book (P/B): 1.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.51
• 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: $4,399.48
• Price Target Upside: 0.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 71 Outperform
• Price Target: ¥4,897.00 ▲(12.27%Upside)

Japan Tobacco's strong financial performance and positive earnings call are major strengths, driving the overall score. Technical indicators show an upward trend, though valuation concerns with a high P/E ratio present risks. The earnings call's strategic insights contribute positively despite uncertainties in certain business areas.

Japan Tobacco Business Overview & Revenue Model

Company Description

Japan Tobacco Inc., a tobacco company, manufactures and sells tobacco products, prescription drugs, and processed foods in Japan and internationally. The company operates through four segments: Domestic Tobacco, International Tobacco, Pharmaceutical, and Processed Food. It offers tobacco products, such as cigarettes, cigars, pipe tobacco, oral tobacco, waterpipe tobacco, kretek, and fine cut products under the Winston, Camel, MEVIUS, and LD brands. The company also provides reduced-risk products, including tobacco-infused vapor and heated tobacco products, E-Vapor products, etc. under the Ploom, Logic, Ploom TECH, Ploom TECH+, and Ploom S brands. In addition, it researches and develops, manufactures, and sells prescription drugs for the therapeutic areas, such as cardiovascular, renal and metabolism, immunology, and neuroscience. Further, the company provides staple food products, such as frozen noodles and okonomiyaki, and frozen and packed cooked rice; ambient processed foods; bakery products; and seasonings, including yeast extracts and oyster sauce. Japan Tobacco Inc. was founded in 1898 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Japan Tobacco primarily generates revenue through the sale of tobacco products across various international markets. The company's key revenue streams come from its domestic and international tobacco business, with a significant portion derived from international markets, thanks to its wide portfolio of global brands. JT's pharmaceutical and processed food sectors also contribute to its earnings, although to a lesser extent compared to its tobacco operations. Strategic acquisitions and partnerships in different countries have allowed JT to expand its market presence and enhance its distribution networks, further supporting its revenue growth. The company's focus on diversifying its product offerings and entering new markets is a significant factor contributing to its financial performance.

Japan Tobacco Financial Statement Overview

Summary

Japan Tobacco demonstrates sound financial health with strong profit margins and consistent revenue growth. The balance sheet reflects financial stability with moderate leverage. Despite a decline in free cash flow, cash generation remains robust.

Income Statement

Japan Tobacco's income statement shows a strong financial performance with a consistent increase in total revenue over the years, indicating a healthy growth trajectory. The gross profit margin for TTM is 54.92%, and the net profit margin is 14.32%, both reflecting efficient cost management. The EBIT and EBITDA margins are 21.77% and 28.38% respectively, showing solid operational efficiency. The revenue growth rate from the previous annual report to TTM is 2.75%, which is moderate but steady.

Balance Sheet

The balance sheet indicates financial stability with a debt-to-equity ratio of 0.44, suggesting moderate leverage. The return on equity (ROE) for TTM is 12.25%, showcasing effective management of equity capital. The equity ratio stands at 47.63%, reflecting a strong equity base. While the company maintains a substantial amount of cash and equivalents, its total assets have slightly declined from the previous period, warranting monitoring.

Cash Flow

The cash flow statement reveals robust cash generation capabilities with a high operating cash flow to net income ratio of 1.21. The free cash flow has decreased compared to the previous period, with a free cash flow growth rate of -14.64%. Despite this decline, the company's free cash flow to net income ratio remains strong at 0.92, indicating solid cash profitability.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.24T	3.15T	2.84T	2.66T	2.32T	2.09T
	Gross Profit
1.78T	1.74T	1.62T	1.57T	1.37T	1.19T
	EBIT
704.54B	697.20B	672.41B	653.58B	499.02B	469.05B
	EBITDA
918.32B	837.14B	824.78B	829.17B	687.13B	622.71B
	Net Income Common Stockholders
463.58B	179.24B	482.29B	442.72B	338.49B	310.25B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
809.36B	1.20T	1.04T	904.56B	721.73B	557.67B
	Total Assets
7.94T	8.37T	7.28T	6.55T	5.77T	5.38T
	Total Debt
1.67T	1.78T	1.14T	958.31B	918.62B	958.88B
	Net Debt
856.84B	691.43B	102.05B	91.43B	196.89B	420.04B
	Total Liabilities
4.08T	4.52T	3.37T	2.93T	2.89T	2.78T
	Stockholders Equity
3.78T	3.77T	3.83T	3.54T	2.81T	2.52T
Cash Flow		Free Cash Flow
428.63B	502.24B	445.80B	384.39B	495.99B	411.21B
	Operating Cash Flow
561.61B	630.01B	567.01B	483.80B	598.91B	519.83B
	Investing Cash Flow
-493.16B	-439.77B	-126.13B	-101.82B	-97.50B	5.35B
	Financing Cash Flow
66.20B	-94.91B	-270.50B	-306.18B	-353.14B	-297.40B

Japan Tobacco Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4362.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2914, the sentiment is Positive. The current price of 4362 is below the 20-day moving average (MA) of 4406.00, above the 50-day MA of 4322.38, and above the 200-day MA of 4099.47, indicating a neutral trend. The MACD of 2.96 indicates Positive momentum. The RSI at 48.31 is Neutral, neither overbought nor oversold. The STOCH value of 56.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2914.

Japan Tobacco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2914	71 Outperform	$7.81T	43.54	4.55%	4.37%	10.98%	-63.74%
Sector *	65 Neutral	$8.92B	15.03	4.68%	6.11%	3.59%	-2.49%
ASBRF		$20.02B	15.19	7.40%	2.73%	―	―
KNBWF		$11.64B	28.11	4.91%	3.58%	―	―
SOOBF		$3.95B	111.11	2.87%	<0.01%	―	―
STBFF		$10.04B	17.14	7.61%	0.02%	―	―
2531	79 Outperform	¥239.97B	14.81		2.52%	6.87%	1.26%

Japan Tobacco Corporate Events

Japan Tobacco Reports Strong Q1 2025 Financial Performance

Japan Tobacco Inc. reported its consolidated financial results for the first quarter of 2025, showing a significant increase in revenue and operating profit compared to the same period last year. The company’s revenue rose by 11.7% to 826,981 million yen, and operating profit increased by 15.3% to 248,758 million yen. Despite a slight increase in profit attributable to owners of the parent company, comprehensive income for the period saw a substantial decline. The company maintains its forecast for the fiscal year ending December 31, 2025, with expected revenue growth of 3.9% and a significant increase in operating profit by 107.4%. These results and forecasts indicate a strong operational performance and strategic positioning in the industry, with a focus on sustainable growth.

Japan Tobacco Raises Capital Through International Senior Notes Issuance

Japan Tobacco Inc. and its subsidiary JT International Financial Services B.V. have successfully issued senior notes in international securities markets, raising significant capital. The proceeds from these notes, which are listed on the Luxembourg Stock Exchange, will be used to repay interest-bearing debt, potentially strengthening the company’s financial position and enhancing its operational flexibility.

Japan Tobacco Announces New Bond Issuance for Debt Repayment

Japan Tobacco Inc. has announced the issuance of its 18th and 19th series straight bonds in Japan, totaling 70 billion yen, with terms of 5 and 10 years, respectively. The proceeds from these bonds are intended for repaying interest-bearing debt, which could impact the company’s financial structure and market positioning.

Japan Tobacco Subsidiary to Distribute USD 1.1 Billion Dividend

Japan Tobacco Inc. announced that its subsidiary, JT International Holding B.V., will distribute a dividend of USD 1,100 million, which will be recorded as non-operating income in JT’s non-consolidated financial statements for 2025. This dividend will not materially impact JT’s consolidated financial results, reflecting a strategic financial maneuver rather than an operational change.