Japan Tobacco (2914) AI Stock Analysis

• Market Cap: ¥8.36T
• Dividend Yield: 4.26%
• Average Volume (3M): 4.22M
• Price to Earnings (P/E): 43.1
• Beta (1Y): 0.49
• Revenue Growth: 9.82%
• EPS Growth: -61.24%
• Country: JP
• Employees: 53,593
• Sector: Consumer Defensive
• Sector Strength: 45
• Industry: Tobacco
• EPS (TTM): 91.50
• Shares Outstanding: 2,000,000,000
• 10 Day Avg. Volume: 2,686,540
• 30 Day Avg. Volume: 4,217,713
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥4,942.51
• Price Target Upside: 4.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 72 Outperform
• Price Target: ¥5,244.00 ▲(10.59% Upside)

Japan Tobacco's overall stock score is driven by strong financial performance and positive earnings call sentiment, highlighting robust profitability and successful strategic initiatives. However, the high P/E ratio and technical indicators suggest caution due to potential overvaluation and short-term volatility.

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 Inc. generates revenue primarily through the sale of tobacco products, which account for the majority of its earnings. The company operates in both domestic and international markets, with its Global Tobacco Business being the most significant revenue contributor. This includes the manufacture and sale of cigarettes and other tobacco-related products. JT also derives income from its Pharmaceutical Business, where it engages in the research, development, manufacturing, and marketing of prescription drugs. Additionally, the Processed Food Business contributes to the company's revenue through the sale of food and beverage products. Strategic acquisitions and partnerships, particularly in expanding its international tobacco market presence, also play a crucial role in enhancing JT's revenue streams.

Japan Tobacco Financial Statement Overview

Summary

Japan Tobacco demonstrates strong financial health with robust profitability and a solid balance sheet. While revenue and profit margins are favorable, the declining free cash flow growth poses a potential risk. Overall, the company maintains a stable financial position with effective leverage management, but should focus on reversing the negative cash flow trend to sustain long-term growth.

Income Statement

Japan Tobacco's income statement shows strong profitability with a consistent gross profit margin around 55% and a net profit margin improving to 14.32% in TTM. Revenue growth is positive at 2.41% in TTM, indicating steady expansion. EBIT and EBITDA margins are robust, reflecting efficient operations. However, the slight decline in gross profit margin over the years suggests potential cost pressures.

Balance Sheet

The balance sheet is solid with a manageable debt-to-equity ratio of 0.44 in TTM, indicating prudent leverage. Return on equity is healthy at 11.47%, showcasing effective use of equity. The equity ratio is stable, reflecting a strong capital structure. However, the increase in total debt over time warrants monitoring.

Cash Flow

Cash flow analysis reveals a decrease in free cash flow growth at -3.67% in TTM, which could impact future investments. The operating cash flow to net income ratio is moderate, suggesting decent cash generation relative to earnings. The free cash flow to net income ratio is strong, indicating good cash conversion, but the negative growth trend is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.31T	3.15T	2.84T	2.66T	2.32T	2.09T
Gross Profit	1.86T	1.74T	1.62T	1.57T	1.37T	1.19T
EBITDA	626.11B	837.14B	824.78B	829.17B	687.13B	622.71B
Net Income	478.10B	179.24B	482.29B	442.72B	338.49B	310.25B
Balance Sheet
Total Assets	8.26T	8.37T	7.28T	6.55T	5.77T	5.38T
Cash, Cash Equivalents and Short-Term Investments	865.18B	1.20T	1.04T	866.88B	721.73B	557.67B
Total Debt	1.63T	1.78T	1.14T	958.31B	918.62B	1.03T
Total Liabilities	4.12T	4.52T	3.37T	2.93T	2.89T	2.78T
Stockholders Equity	4.06T	3.77T	3.83T	3.54T	2.81T	2.52T
Cash Flow
Free Cash Flow	412.88B	502.24B	445.80B	384.39B	495.99B	411.21B
Operating Cash Flow	537.26B	630.01B	567.01B	483.80B	598.91B	519.83B
Investing Cash Flow	-543.03B	-439.77B	-126.13B	-101.82B	-97.50B	5.35B
Financing Cash Flow	-58.29B	-94.91B	-270.50B	-306.18B	-353.14B	-297.40B

Japan Tobacco Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4742.00
• 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 4742 is below the 20-day moving average (MA) of 4747.40, above the 50-day MA of 4477.25, and above the 200-day MA of 4139.27, indicating a neutral trend. The MACD of 54.93 indicates Positive momentum. The RSI at 57.27 is Neutral, neither overbought nor oversold. The STOCH value of 21.72 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	72 Outperform	¥8.36T	43.14	4.85%	4.26%	9.82%	-61.24%
Sector *	63 Neutral	$20.50B	14.76	-2.72%	3.09%	1.90%	-4.74%
ASBRF	―	$19.37B	16.84	6.47%	3.82%	―	―
KNBWF	―	$12.29B	33.60	4.64%	4.58%	―	―
SOOBF	―	$3.95B	155.47	1.95%	0.81%	―	―
STBFF	―	$9.89B	16.84	7.45%	3.98%	―	―
2531	74 Outperform	¥338.48B	21.99		1.77%	8.25%	-6.60%

Japan Tobacco Corporate Events

Japan Tobacco Raises 2025 Dividend Forecast Amid Strong Performance

Japan Tobacco Inc. has announced an increase in its dividend forecast for the year ending December 2025, raising the year-end dividend per share by 7 yen to 104 yen, resulting in a total annual dividend of 208 yen. This decision reflects the company’s improved financial performance in the first half of 2025 and aligns with its shareholder return policy, indicating a positive outlook for stakeholders.

The most recent analyst rating on (JP:2914) stock is a Buy with a Yen4550.00 price target. To see the full list of analyst forecasts on Japan Tobacco stock, see the JP:2914 Stock Forecast page.

Japan Tobacco Reports Strong First Half 2025 Financial Results

Japan Tobacco Inc. reported a 10.5% increase in revenue for the first half of 2025, with operating profit rising by 10.9%. The company has revised its earnings and dividend forecasts upward, reflecting confidence in its financial performance and strategic growth plans. The adjustments indicate a positive outlook for stakeholders, as the company aims for sustainable growth with a focus on mid- to long-term profitability.

The most recent analyst rating on (JP:2914) stock is a Buy with a Yen4550.00 price target. To see the full list of analyst forecasts on Japan Tobacco stock, see the JP:2914 Stock Forecast page.

Japan Tobacco to Receive Dividend from Subsidiary

Japan Tobacco Inc. announced that its subsidiary, JT International Holding B.V., will distribute a dividend of approximately USD 560 million, which will be recorded as non-operating income in JT’s non-consolidated financial statements for the fiscal year 2025. However, this dividend will not materially impact JT’s consolidated financial results for the same period.

The most recent analyst rating on (JP:2914) stock is a Buy with a Yen4550.00 price target. To see the full list of analyst forecasts on Japan Tobacco stock, see the JP:2914 Stock Forecast page.

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.