Gunze (3002) AI Stock Analysis

• Market Cap: ¥154.86B
• Dividend Yield: 3.38%
• Average Volume (3M): 190.29K
• Price to Earnings (P/E): 48.9
• Beta (1Y): 0.53
• Revenue Growth: >-0.01%
• EPS Growth: -49.83%
• Country: JP
• Employees: 4,883
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): N/A
• Shares Outstanding: 34,587,032
• 10 Day Avg. Volume: 144,520
• 30 Day Avg. Volume: 190,293
• PEG Ratio: 0.53
• Price to Book (P/B): 0.73
• Price to Sales (P/S): 0.64
• P/FCF Ratio: 82.10
• 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: ¥4,350.00
• Price Target Upside: -0.46% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: ¥5,125.00 ▲(17.28% Upside)
• Action: Reiterated Date: 11/28/25
• Date: Action: Reiterated 11/28/25

Gunze's overall stock score is driven by its strong financial performance and bullish technical indicators. However, the high P/E ratio suggests potential overvaluation, and liquidity risks from declining free cash flow growth warrant caution. The absence of earnings call and corporate events data limits further insights.

Positive Factors

Strong balance sheet

Gunze's very low leverage and high equity ratio provide durable financial resilience. Minimal debt reduces bankruptcy risk, preserves borrowing capacity for strategic investments, and supports steady capital allocation to R&D or capex without destabilizing liquidity over the medium term.

Diversified business model

The company's dual focus on industrial functional materials and consumer apparel spreads exposure across different demand cycles. This structural diversification supports more stable aggregated revenues and allows cross-segment resource allocation to capture long-term trends in materials innovation and consumer textiles.

Improving profitability margins

Sustained gross margin above 30% and an improving net margin indicate stronger product mix and cost control. These margin gains enhance internal cash generation potential and support reinvestment or dividend capacity, underpinning longer-term earnings sustainability if maintained.

Negative Factors

Declining free cash flow growth

A material slowdown in free cash flow growth due to sustained high capex reduces financial flexibility. If continuing, this trend can constrain dividend policy, limit opportunistic investments, and increase reliance on internal reserves despite a strong balance sheet, weakening resilience over months.

Modest operating (EBIT) margin

A sub-6% EBIT margin limits the company's cushion against cost inflation and reduces capacity to fund competitive investments. Modest operating profitability may constrain strategic initiatives and leave less room to absorb demand downturns, affecting medium-term competitiveness.

Negative EPS growth

A steep year-over-year decline in EPS signals earnings volatility or one-off pressures that could impair investor confidence and internal reinvestment. If EPS contraction persists, it may indicate structural challenges in converting sales into sustainable shareholder returns over the medium term.

Gunze Business Overview & Revenue Model

Company Description

Gunze Limited engages in the functional solutions, apparel, and lifestyle creations businesses in Japan. It offers plastic films comprising shrink films, flexible multilayer sheets, functional and multilayer film tubings, opp films, and nylon films, as well as consulting services related to comprehensive package system; engineering plastics, such as small-diameter fluoro resin heat-shrinkable tubes, thin-walled fluoro resin tubes, fiber products, films and sheets, and seamless belts; electronic components, including various touch screens and functional films, as well as commissioned manufacturing services; and medical materials consisting of bioabsorbable surgical suture threads, bone fixation devices, artificial dermis, absorbable reinforcement felt, and medical stockings. The company also provides equipment for packaging and film wrapping, post-press of printing, and pharmaceuticals and cosmetics, as well as equipment for dairy, beverage, and food products; innerwear, legwear, nightwear, and home casual wear products for physical and mental relaxation; and threads and accessories, such as sewing threads for clothing, industrial materials, and automotive applications. In addition, it operates 22 Gunze sports clubs, and fitness studios, spas, and junior schools; sells plant materials and nursery trees, flowers, and gardening products; develops commercial facilities; leases shopping complexes, housing, and office buildings; and offers technology, equipment, and funds energy conservation, as well as thermal insulation materials and solar power generation systems. The company was formerly known as Gunze Silk Manufacturing Co., Ltd. and changed its name to Gunze Limited in 1967. Gunze Limited was founded in 1896 and is headquartered in Ayabe, Japan.

How the Company Makes Money

Gunze generates revenue through multiple streams, primarily from the sale of textiles and functional materials, which are used in fashion and industrial applications. The apparel segment, including garments made from its proprietary materials, contributes significantly to its earnings. The company also earns income from its healthcare division, which offers medical devices and materials, benefiting from partnerships with healthcare providers and manufacturers. Additionally, Gunze engages in research and development to innovate new products, thereby maintaining a competitive edge and creating new revenue opportunities. Strategic collaborations with other companies in the textile and healthcare sectors further enhance its market presence and financial performance.

Gunze Financial Statement Overview

Summary

Gunze demonstrates solid financial performance with steady revenue growth, strong profit margins, and a robust balance sheet characterized by low leverage and high equity. However, the decline in free cash flow growth due to high capital expenditure poses a risk to liquidity.

Income Statement

Gunze has demonstrated a steady increase in revenue over the years, with a notable revenue growth of 3.2% from 2024 to 2025. The gross profit margin for 2025 stood at 31.5%, indicating strong cost management. The net profit margin improved to 4.6% in 2025 from 3.8% in 2024, showing enhanced profitability. However, the EBIT margin, while improving, remains modest at 5.8% in 2025, suggesting room for operational efficiency improvements.

Balance Sheet

Gunze's balance sheet is robust, with a low debt-to-equity ratio of 0.07 in 2025, indicating minimal leverage and a strong equity position. The return on equity improved to 5.3% in 2025, reflecting efficient use of shareholder funds. The equity ratio remained stable at 74.7%, showcasing a solid financial foundation. These metrics highlight Gunze's strong financial stability and low-risk profile.

Cash Flow

The company's cash flow statements reveal a solid operating cash flow to net income ratio of 1.84 in 2025, indicating effective cash generation relative to net income. However, free cash flow has seen a decrease, with a significant decline in free cash flow growth, affected by high capital expenditures and investing activities, posing a risk to liquidity if continued.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	135.97B	137.12B	132.88B	136.03B	124.31B	123.65B
Gross Profit	43.05B	43.18B	41.72B	40.48B	37.61B	37.98B
EBITDA	12.09B	16.04B	10.92B	12.53B	11.90B	9.77B
Net Income	3.21B	6.28B	5.11B	4.50B	2.94B	2.15B
Balance Sheet
Total Assets	158.63B	159.68B	161.97B	165.93B	158.22B	159.63B
Cash, Cash Equivalents and Short-Term Investments	10.02B	10.54B	10.82B	11.55B	14.47B	9.72B
Total Debt	15.81B	8.86B	9.21B	16.09B	10.68B	17.39B
Total Liabilities	46.63B	38.69B	41.51B	48.24B	43.43B	44.45B
Stockholders Equity	110.24B	119.19B	118.77B	115.88B	113.03B	113.71B
Cash Flow
Free Cash Flow	0.00	1.06B	2.79B	-8.43B	4.41B	3.80B
Operating Cash Flow	0.00	11.57B	10.41B	1.79B	9.15B	8.60B
Investing Cash Flow	0.00	-7.49B	-190.00M	-5.92B	6.81B	1.17B
Financing Cash Flow	0.00	-5.18B	-11.35B	1.01B	-12.36B	-9.34B

Gunze Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4370.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3002, the sentiment is Positive. The current price of 4370 is below the 20-day moving average (MA) of 4582.75, below the 50-day MA of 4492.20, and above the 200-day MA of 3932.18, indicating a bullish trend. The MACD of 53.30 indicates Negative momentum. The RSI at 69.89 is Neutral, neither overbought nor oversold. The STOCH value of 76.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3002.

Gunze Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3569	78 Outperform	¥195.02B	13.54	10.24%	2.43%	6.08%	8.55%
3104	75 Outperform	¥121.70B	24.35	―	1.79%	10.76%	54.82%
3002	66 Neutral	¥154.86B	48.89	2.34%	3.38%	>-0.01%	-49.83%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3591	59 Neutral	¥236.41B	19.95	5.31%	2.29%	-6.04%	146.54%
3402	58 Neutral	¥1.97T	47.60	3.37%	1.85%	-2.18%	26.45%
3529	57 Neutral	¥17.65B	-9.38	―	―	4.15%	-289.87%

Gunze Corporate Events

Gunze Reports Progress on Share Buyback, Repurchases 776,400 Shares to Date

Gunze Limited has reported the latest progress on its ongoing share buyback program authorized by its board in November 2025. Between January 1 and January 31, 2026, the company repurchased 276,000 of its common shares for a total of ¥1,240,842,500, bringing cumulative purchases under the current authorization to 776,400 shares at a cost of ¥3,295,745,000. This remains within the board-approved ceiling of up to 1.4 million shares and ¥5 billion to be executed through March 24, 2026, underscoring management’s continued capital return policy and potential intention to enhance shareholder value by reducing the number of shares outstanding.

The most recent analyst rating on (JP:3002) stock is a Buy with a Yen5163.00 price target. To see the full list of analyst forecasts on Gunze stock, see the JP:3002 Stock Forecast page.

Gunze Slashes Full-Year Profit Forecast on Broad Demand Weakness but Holds Dividend

Gunze has sharply cut its full-year consolidated forecast for the fiscal year ending March 2026, citing weaker-than-expected conditions across several core businesses. The company now expects net sales of ¥133 billion versus a previous ¥140 billion outlook, and profit attributable to owners of parent of ¥1.6 billion, down 42.9% from the prior forecast and significantly below the previous year’s ¥6.28 billion, reflecting broad-based profit pressure. Management attributes the downgrade to sluggish overseas demand and price pressure in plastic films despite solid domestic sales, a slower-than-hoped recovery in the semiconductor-related engineering plastics segment, and ongoing headwinds in its medical business from delayed drug approvals in Japan and tighter, more nationalistic healthcare policies in China. Its apparel operations, although progressing with structural reforms, are hurt by weak consumer sentiment and a mild winter that has dampened seasonal sales, further dragging on revenues and profitability. Despite the earnings downgrade, Gunze is maintaining its planned annual dividend of ¥216 per share, signaling an intention to sustain shareholder returns even as it navigates a tougher operating environment.

The most recent analyst rating on (JP:3002) stock is a Buy with a Yen5163.00 price target. To see the full list of analyst forecasts on Gunze stock, see the JP:3002 Stock Forecast page.

Gunze Warns of Sharp Profit Decline as Nine‑Month Earnings Weaken and Outlook Cut

Gunze reported weaker consolidated results for the nine months ended December 31, 2025, with net sales down 3.0% year on year to ¥99.8 billion and operating profit declining 11.5% to ¥5.6 billion. Ordinary profit fell 13.4% and profit attributable to owners of parent plunged 70.2% to ¥1.3 billion, reflecting a significant erosion in profitability and a drop in comprehensive income, while the equity ratio also slipped from 74.6% to 68.9% amid higher treasury share holdings and reduced net assets. The company maintained its dividend stance, having paid a substantial year-end dividend in the prior fiscal year that included a notable special component, and it still plans a combined ordinary and special dividend for the year ending March 31, 2026, even after a 2-for-1 stock split. Gunze revised its full-year forecast downward, now expecting a 3.0% decline in net sales and sharp double‑digit drops in operating, ordinary, and net profit, signaling ongoing pressure on earnings as it adjusts its consolidation scope and accounting policies, and underscoring a more challenging operating environment for shareholders and other stakeholders.

The most recent analyst rating on (JP:3002) stock is a Buy with a Yen5163.00 price target. To see the full list of analyst forecasts on Gunze stock, see the JP:3002 Stock Forecast page.

Gunze to Absorb Apparel Subsidiary SEESAY in Streamlining Move

Gunze Limited has approved an absorption-type merger of its wholly owned apparel subsidiary SEESAY Co., Ltd., effective April 1, 2026, as part of ongoing structural reforms in its apparel business. By dissolving SEESAY and integrating its apparel planning and sales operations directly into the parent company, Gunze aims to streamline group management and improve operational efficiency without issuing new shares or altering its existing corporate structure, suggesting a tightening of control over loss-making units while maintaining stability for shareholders and other stakeholders.

The most recent analyst rating on (JP:3002) stock is a Buy with a Yen5186.00 price target. To see the full list of analyst forecasts on Gunze stock, see the JP:3002 Stock Forecast page.

Gunze Reports Progress on Share Buyback Program Authorized for up to ¥5 Billion

Gunze Limited has disclosed the status of its ongoing share buyback program authorized by its board on November 5, 2025, under which the company is repurchasing its own common shares pursuant to provisions of Japan’s Companies Act. Between December 1 and December 31, 2025, the company bought back 319,200 shares for a total of ¥1,344,488,000, bringing cumulative repurchases under this authorization to 500,400 shares at a cost of ¥2,054,902,500 as of December 31, 2025, out of a total approved ceiling of up to 1.4 million shares and ¥5 billion through March 24, 2026, signaling continued capital allocation toward shareholder returns and potential enhancement of per-share value.

The most recent analyst rating on (JP:3002) stock is a Hold with a Yen4460.00 price target. To see the full list of analyst forecasts on Gunze stock, see the JP:3002 Stock Forecast page.

Gunze Limited Announces Treasury Share Buyback

Gunze Limited has announced the purchase of 181,200 treasury shares between November 6 and November 30, 2025, at a total cost of ¥710,414,500. This move is part of a larger plan approved by the Board of Directors to buy back up to 1.4 million shares, representing 4.05% of the total outstanding shares, with a budget of ¥5,000 million, aimed at enhancing shareholder value.

The most recent analyst rating on (JP:3002) stock is a Hold with a Yen4460.00 price target. To see the full list of analyst forecasts on Gunze stock, see the JP:3002 Stock Forecast page.