Japan Tobacco (2914) AI Stock Analysis

• Market Cap: ¥10.24T
• Dividend Yield: 3.44%
• Average Volume (3M): 3.98M
• Price to Earnings (P/E): 41.2
• Beta (1Y): 0.46
• Revenue Growth: 10.18%
• EPS Growth: -48.50%
• Country: JP
• Employees: 53,593
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Tobacco
• EPS (TTM): 108.05
• Shares Outstanding: 2,000,000,000
• 10 Day Avg. Volume: 4,011,180
• 30 Day Avg. Volume: 3,977,306
• PEG Ratio: -0.64
• Price to Book (P/B): 1.92
• Price to Sales (P/S): 2.30
• P/FCF Ratio: 14.42
• 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: ¥6,400.38
• Price Target Upside: 27.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• Price Target: ¥6,542.00 ▲(30.32% Upside)

Japan Tobacco's strong financial performance and positive earnings call are the most significant factors driving the score. The stock's technical indicators suggest a bullish trend, though caution is warranted due to potential overvaluation. The company's ability to maintain growth momentum while managing risks in key markets will be crucial for future performance.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust market demand and effective business strategies, enhancing long-term financial stability.

Product Innovation

Successful product launches in the RRP sector demonstrate innovation and adaptability, crucial for sustaining competitive advantage.

Strategic Acquisition

Acquisitions like Vector Group expand market presence and diversify revenue streams, supporting long-term growth.

Negative Factors

Negative FX Impact

Negative FX impacts can erode profitability, posing a risk to financial performance if not managed effectively.

Processed Food Business Decline

Decline in processed food business due to cost pressures may hinder diversification efforts and overall profitability.

Potential Risks in Russia and Turkey

Economic and regulatory challenges in key markets like Russia and Turkey can impact sales and growth potential.

Japan Tobacco Business Overview & Revenue Model

Company Description

Japan Tobacco Inc. (JT) is a leading global tobacco company headquartered in Tokyo, Japan. The company operates through various segments, including domestic tobacco, international tobacco, and pharmaceuticals. JT is known for its diverse portfolio of well-established brands, including Mild Seven and Camel, as well as its growing presence in the reduced-risk products sector, such as e-cigarettes and heated tobacco products. Additionally, the company is involved in the production and sale of food products and pharmaceuticals, further diversifying its business model.

How the Company Makes Money

Japan Tobacco generates revenue primarily through the sale of its tobacco products, which include cigarettes and other nicotine products. The domestic tobacco segment contributes significantly to its earnings, driven by strong brand loyalty and market share in Japan. Internationally, JT benefits from its acquisitions and partnerships, expanding its footprint in various markets worldwide. The company also earns revenue from its reduced-risk products, capitalizing on the growing demand for alternatives to traditional smoking. Furthermore, JT has invested in research and development for innovative products, which helps to sustain its market position and attract consumers. Strategic partnerships and alliances with distributors and retailers also play a crucial role in enhancing its sales and distribution capabilities.

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	3.39T	3.15T	2.84T	2.66T	2.32T	2.09T
Gross Profit	1.90T	1.64T	1.51T	1.45T	1.26T	1.09T
EBITDA	709.55B	454.17B	832.83B	829.17B	687.13B	622.71B
Net Income	248.57B	179.24B	482.29B	442.72B	338.49B	310.25B
Balance Sheet
Total Assets	8.20T	8.37T	7.28T	6.55T	5.77T	5.38T
Cash, Cash Equivalents and Short-Term Investments	729.46B	1.08T	1.04T	866.88B	721.73B	538.84B
Total Debt	1.61T	1.79T	1.20T	1.02T	979.16B	1.03T
Total Liabilities	4.03T	4.52T	3.37T	2.93T	2.89T	2.78T
Stockholders Equity	4.14T	3.77T	3.83T	3.54T	2.81T	2.52T
Cash Flow
Free Cash Flow	388.99B	502.24B	472.15B	402.39B	512.56B	434.51B
Operating Cash Flow	524.99B	630.01B	567.01B	483.80B	598.91B	519.83B
Investing Cash Flow	-468.40B	-439.74B	-125.72B	-101.80B	-97.46B	2.34B
Financing Cash Flow	-129.43B	-94.94B	-270.91B	-306.20B	-353.18B	-294.39B

Japan Tobacco Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5020.00
• 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 5020 is below the 20-day moving average (MA) of 5785.25, below the 50-day MA of 5392.68, and above the 200-day MA of 4582.69, indicating a bullish trend. The MACD of 105.70 indicates Positive momentum. The RSI at 63.36 is Neutral, neither overbought nor oversold. The STOCH value of 38.38 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	75 Outperform	¥10.24T	41.21	6.23%	3.44%	10.18%	-48.50%
2587	72 Outperform	¥1.48T	17.28	6.97%	2.39%	1.26%	-13.39%
2501	65 Neutral	¥630.82B	88.94	3.63%	0.64%	0.25%	-58.68%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
2531	61 Neutral	¥309.19B	24.07	―	1.91%	5.66%	-25.08%
2502	60 Neutral	¥2.68T	15.26	6.47%	3.05%	0.86%	0.55%
2503	60 Neutral	¥1.88T	22.98	6.93%	3.05%	4.75%	-24.33%

Japan Tobacco Corporate Events

Japan Tobacco Revises Year-End Dividend Guidance Upward

Japan Tobacco Inc. has announced an upward revision of its year-end dividend guidance for the fiscal year ending December 2025, increasing the dividend per share by 26 yen to 130 yen. This revision reflects the company’s improved financial performance and is expected to result in a total annual dividend per share of 234 yen, highlighting JT’s commitment to shareholder returns.

Japan Tobacco’s Q3 Results Highlight Challenges and Expansion Efforts

Japan Tobacco’s third-quarter results presentation highlights various challenges and risks, including health concerns, regulatory changes, and global competition, which could impact its operations and industry positioning. The company is focused on diversifying its business and expanding internationally, but faces uncertainties such as economic changes and foreign exchange fluctuations.

Japan Tobacco Reports Strong Financial Growth and Strategic Focus Shift

Japan Tobacco Inc. reported a substantial increase in its consolidated financial results for the nine months ending September 30, 2025, with a 13.2% rise in revenue and a 20.8% increase in operating profit compared to the previous year. The company has reclassified its Pharmaceutical Business as discontinued operations, focusing on its core tobacco business, which has shown strong performance and growth. The company has also revised its earnings forecasts and dividend payouts, reflecting its confidence in sustained growth and profitability.