Toray Industries (3402) AI Stock Analysis

• Market Cap: ¥1.95T
• Dividend Yield: 1.85%
• Average Volume (3M): 4.93M
• Price to Earnings (P/E): 47.1
• Beta (1Y): 0.76
• Revenue Growth: -2.18%
• EPS Growth: 26.45%
• Country: JP
• Employees: 48,140
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): 2.30
• Shares Outstanding: 1,504,481,400
• 10 Day Avg. Volume: 6,748,400
• 30 Day Avg. Volume: 4,930,880
• PEG Ratio: 0.08
• Price to Book (P/B): 0.95
• Price to Sales (P/S): 0.63
• P/FCF Ratio: 21.35
• 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: ¥1,302.50
• Price Target Upside: 17.82% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: ¥1,320.00 ▲(19.40% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

Overall score reflects moderate financial performance constrained by weak and deteriorating free cash flow and low net profitability, partially offset by strong technical uptrend signals. Valuation is a key drag due to the high P/E and only modest dividend yield.

Positive Factors

Diversified advanced materials portfolio

Toray's business spans fibers, plastics, carbon-fiber composites and water-treatment membranes, giving it multiple end-market exposures and product adjacencies. This diversification reduces revenue concentration risk, enables cross-selling and allows shifts toward higher-value specialty materials that support durable revenue resilience over months.

Manageable leverage and balance-sheet resilience

A debt-to-equity near 0.5 and an expanding equity base indicate improved balance-sheet flexibility. This lower leverage reduces refinancing and solvency risk, supports capital spending and R&D, and provides capacity to absorb cyclical dips or pursue strategic investments without immediate reliance on costly external funding.

Stable revenue with recovering operating margins

Consistent revenue and recovering gross/EBITDA margins demonstrate operational resilience and improved mix or pricing power. Sustained mid-single-digit top-line trends with ~10% EBITDA provide a structural cushion to support reinvestment and withstand weaker volume periods over the medium term.

Negative Factors

Weak and deteriorating free cash flow

A sharp fall in free cash flow and FCF only ~21% of net income points to weak cash conversion. Low coverage ratios (~0.28–0.30) limit internal funding for capex, dividends or strategic initiatives, increasing reliance on external financing and constraining flexibility during downturns.

Low and volatile returns on capital

Low ROE and thin net margins indicate the company's large asset and capital base is not generating strong profits. Persistent low profitability reduces ability to self-fund growth, limits shareholder returns, and makes long-term capital allocation outcomes more sensitive to small operational setbacks.

Exposure to cyclical end markets

Significant sales to automotive, aerospace and apparel tie performance to industrial and consumer cycles, creating structural demand volatility. Even with product diversity, revenue and margins can swing with multi-month industry cycles, complicating capacity planning and earnings predictability.

Toray Industries Business Overview & Revenue Model

Company Description

Toray Industries, Inc., together with its subsidiaries, manufactures, processes, and sells fibers and textiles, performance chemicals, carbon fiber composite materials, environment and engineering products, and life science products in Japan, China, North America, Europe, and internationally. The company offers filament yarns, staple fibers, and spun yarns, as well as woven and knitted fabrics of nylon, polyester, acrylics, and others; non-woven fabrics; ultra-fine fibers; and apparel products. It also provides nylon, ABS, PBT, PPS, and other resins and molded products; polyolefin foam products; polyester, polyethylene, polypropylene, and other films; processed film products; raw materials for synthetic fibers and other plastics; fine chemicals; electronic and information materials; and graphic materials. In addition, the company offers carbon fibers, carbon fiber composite materials, and molded products; analysis, physical evaluation, research, and other services; and pharmaceuticals, medical devices, etc. Further, it provides engineering services; condominiums; industrial equipment and machinery; IT-related equipment; water treatment membranes and related equipment; and materials for housing, building, and civil engineering applications. The company was formerly known as Toyo Rayon Co., Ltd. and changed its name to Toray Industries, Inc. in 1970. The company was incorporated in 1926 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Toray Industries generates revenue through a diversified model that encompasses several key streams. The primary source of income comes from the sale of fibers and textiles, including synthetic fibers used in apparel and industrial applications. Additionally, the company earns significant revenue from its plastics and chemicals segment, which produces engineering plastics and chemical products for various industries. The carbon fiber composite materials division is also a crucial revenue driver, particularly in aerospace and automotive sectors, where demand for lightweight and high-strength materials is increasing. Toray has formed strategic partnerships and collaborations with leading companies, enhancing its market reach and technological capabilities. Furthermore, investments in R&D enable Toray to innovate and maintain a competitive edge, contributing to its overall earnings. The company's comprehensive approach to sustainability and eco-friendly products also resonates with consumers, further solidifying its revenue base.

Toray Industries Financial Statement Overview

Summary

Operating performance is moderate with stable revenue and recovering operating margins, and leverage appears manageable. The score is held back by low/volatile net profitability (low net margin and lower TTM net income) and a sharp deterioration in free cash flow with weak cash conversion and coverage.

Income Statement

Revenue has been broadly stable, with low-single-digit growth in the most recent periods (TTM (Trailing-Twelve-Months): ~2.2%; FY2025: ~4.0%) after a prior dip. Profitability is moderate for the category: gross margin is ~19–20% and EBITDA margin ~10% in FY2025 and TTM, showing a recovery versus FY2024. The key weakness is earnings volatility and thin bottom-line profitability—net margin is low (TTM ~2.4%) and net income fell materially in TTM versus FY2025, indicating less consistent conversion of operating performance into net profit.

Balance Sheet

Leverage looks manageable: debt-to-equity is around ~0.5 in FY2025 and TTM, an improvement from higher levels in earlier years, and equity has grown over time, supporting balance-sheet resilience. Total assets are large and relatively stable. The main concern is modest shareholder returns—return on equity is low in TTM (~3.4%) and only mid-single-digit in FY2025 (~4.6%), reflecting that the capital base is not translating into strong profitability.

Cash Flow

Cash generation is positive but inconsistent. Operating cash flow in TTM is solid, but free cash flow is weak and declined sharply in TTM (free cash flow down ~54.9% with a much smaller absolute free cash flow level than FY2025). Cash conversion is a notable pressure point: free cash flow is only ~21% of net income in TTM, and operating cash flow relative to the company’s funding needs remains low (coverage ratio ~0.28–0.30 in FY2025 and TTM), suggesting limited flexibility if investment needs or financing costs rise.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.56T	2.56T	2.46T	2.49T	2.23T	1.88T
Gross Profit	508.59B	505.89B	443.52B	420.83B	435.97B	377.50B
EBITDA	256.84B	267.64B	197.91B	242.65B	227.59B	176.45B
Net Income	42.90B	77.91B	21.90B	72.82B	84.23B	45.79B
Balance Sheet
Total Assets	3.52T	3.29T	3.47T	3.19T	3.04T	2.85T
Cash, Cash Equivalents and Short-Term Investments	245.56B	237.29B	235.89B	224.00B	229.30B	236.35B
Total Debt	1.02T	842.66B	949.68B	950.09B	935.66B	973.93B
Total Liabilities	1.63T	1.47T	1.62T	1.56T	1.54T	1.53T
Stockholders Equity	1.76T	1.71T	1.74T	1.54T	1.41T	1.24T
Cash Flow
Free Cash Flow	21.98B	75.78B	51.55B	43.00B	46.09B	89.11B
Operating Cash Flow	184.26B	255.03B	185.68B	145.21B	138.29B	211.59B
Investing Cash Flow	-66.65B	-63.20B	-121.00B	-102.72B	-57.17B	-97.87B
Financing Cash Flow	-112.24B	-188.52B	-70.37B	-57.38B	-101.52B	-69.40B

Toray Industries Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1105.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3402, the sentiment is Positive. The current price of 1105.5 is below the 20-day moving average (MA) of 1230.78, below the 50-day MA of 1138.12, and above the 200-day MA of 1015.89, indicating a bullish trend. The MACD of 47.92 indicates Negative momentum. The RSI at 71.11 is Negative, neither overbought nor oversold. The STOCH value of 80.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3402.

Toray Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3569	78 Outperform	¥191.54B	13.30	10.24%	2.43%	6.08%	8.55%
3104	75 Outperform	¥121.70B	24.35	―	1.79%	10.76%	54.82%
3109	72 Outperform	¥14.10B	9.73	―	4.80%	4.49%	26.84%
3110	71 Outperform	¥953.90B	24.76	11.10%	0.99%	9.49%	55.64%
3002	66 Neutral	¥150.78B	47.60	2.34%	3.38%	>-0.01%	-49.83%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3402	58 Neutral	¥1.95T	47.05	3.37%	1.85%	-2.18%	26.45%

Toray Industries Corporate Events

Toray Industries Revamps Top Leadership, Elevates Tsunekawa as Representative Director

Toray Industries has announced changes to its top management, with the Board of Directors resolving to alter the roster of representative members. Executive Vice President and Member of the Board Tetsuya Tsunekawa will become a representative member of the board effective April 1, 2026, while Chairman Akihiro Nikkaku and Executive Vice President Kazuhiko Shuto will step down from their representative roles.

The reshuffle reflects a planned transition in leadership and marks a further elevation of Tsunekawa, who has held senior roles across research, plant management and corporate management since joining the company in 1984. The move signals continuity in strategic direction while refreshing the executive lineup, a shift that stakeholders may view as part of Toray’s longer term governance and succession planning.

The most recent analyst rating on (JP:3402) stock is a Buy with a Yen1376.00 price target. To see the full list of analyst forecasts on Toray Industries stock, see the JP:3402 Stock Forecast page.

Toray Releases 3Q and Nine-Month Results, Updates FY2025 Outlook

Toray Industries has released its consolidated business results for the third quarter and nine-month period ended December 31, 2025. The disclosure also includes a consolidated business forecast for the fiscal year ending March 2026, providing investors and stakeholders with updated visibility on the company’s performance trajectory and expectations.

The most recent analyst rating on (JP:3402) stock is a Buy with a Yen1376.00 price target. To see the full list of analyst forecasts on Toray Industries stock, see the JP:3402 Stock Forecast page.

Toray Profit Slumps Despite Stable Revenue as Outlook Turns Cautiously Upbeat

Toray Industries reported nine-month revenue to December 31, 2025 of ¥1.92 trillion, essentially flat year on year, with core operating income down 3.4% and operating income dropping 31.6%, leading to a 46.6% decline in profit attributable to owners of the parent. Despite weaker profitability and a slight dip in the equity ratio, the company maintained a solid balance sheet, raised its interim dividend to ¥10 per share, and forecast modest full-year growth in revenue, core operating income and profit, signaling cautious confidence in earnings recovery.

Total assets increased to ¥3.52 trillion and equity attributable to owners rose to ¥1.76 trillion, while comprehensive income improved markedly compared with the previous year. Management left the full-year dividend forecast unchanged at ¥20 per share and revised its earnings outlook, with projected full-year revenue of ¥2.6 trillion and profit attributable to owners of ¥82 billion, pointing to gradual improvement in operating conditions and stable shareholder returns.

The most recent analyst rating on (JP:3402) stock is a Buy with a Yen1376.00 price target. To see the full list of analyst forecasts on Toray Industries stock, see the JP:3402 Stock Forecast page.

Toray to Record ¥25 Billion Impairment on Battery Separator Films Amid Weak EV Demand

Toray Industries will book a ¥25.0 billion impairment loss at a Korean subsidiary for the nine months ended December 31, 2025, after reassessing the recoverability of fixed assets in its battery separator films business. The writedown reflects declining profitability in separator films for automotive applications amid a sluggish electric vehicle market and other pressures, and Toray is still examining its full-year consolidated forecast for the fiscal year ending March 31, 2026, which it plans to announce alongside its nine-month results on February 10, 2026.

The most recent analyst rating on (JP:3402) stock is a Buy with a Yen1308.00 price target. To see the full list of analyst forecasts on Toray Industries stock, see the JP:3402 Stock Forecast page.

Toray Advances Share Buyback, Repurchasing Over 27 Million Shares to Date

Toray Industries has continued executing its share repurchase program, buying back 11,010,400 shares of common stock on the Tokyo Stock Exchange between January 1 and January 31, 2026, for a total outlay of about ¥12.2 billion. This brings the cumulative buyback under the board-approved program, which runs from November 17, 2025, to May 31, 2026 and authorizes up to 63 million shares or ¥50 billion, to 27,670,900 shares for approximately ¥29.0 billion, signaling an ongoing commitment to shareholder returns and capital efficiency while still leaving capacity for further repurchases.

The most recent analyst rating on (JP:3402) stock is a Buy with a Yen1258.00 price target. To see the full list of analyst forecasts on Toray Industries stock, see the JP:3402 Stock Forecast page.

Toray Reports Progress on Share Buyback Program Through December 2025

Toray Industries has disclosed the status of its ongoing share repurchase program, confirming that it bought back 10,107,000 shares of common stock on the Tokyo Stock Exchange between December 1 and December 31, 2025, at a total cost of approximately ¥10.19 billion. These purchases form part of a broader buyback authorization approved by the board on November 14, 2025, which allows repurchases of up to 63 million shares, or 4.20% of outstanding shares excluding treasury stock, for a maximum of ¥50 billion through May 31, 2026; as of December 31, 2025, Toray had cumulatively repurchased 16,660,500 shares for about ¥16.76 billion, indicating an active capital return policy that may support shareholder value and optimize its capital structure over the remainder of the program.

The most recent analyst rating on (JP:3402) stock is a Buy with a Yen1500.00 price target. To see the full list of analyst forecasts on Toray Industries stock, see the JP:3402 Stock Forecast page.

Toray Industries Announces Share Repurchase Program

Toray Industries has announced the repurchase of 6,553,500 shares of its common stock for a total price of 6,571,264,095 yen. This repurchase, conducted on the Tokyo Stock Exchange, is part of a broader plan authorized by the Board of Directors to buy back up to 63 million shares by May 2026, potentially impacting the company’s stock value and shareholder returns.

The most recent analyst rating on (JP:3402) stock is a Hold with a Yen1036.00 price target. To see the full list of analyst forecasts on Toray Industries stock, see the JP:3402 Stock Forecast page.