Toray Industries (3402) AI Stock Analysis

• Market Cap: ¥1.68T
• Dividend Yield: 1.85%
• Average Volume (3M): 4.93M
• Price to Earnings (P/E): 29.7
• Beta (1Y): 0.74
• Revenue Growth: -2.18%
• EPS Growth: 26.45%
• Country: JP
• Employees: 48,140
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): 13.07
• 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: ¥1,265.00
• Price Target Upside: 14.43% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: ¥1,224.00 ▲(10.72% Upside)

Toray Industries' overall stock score reflects a stable but challenged financial performance, with concerns about growth and cash generation. The technical analysis suggests potential for moderate gains, but the high valuation could limit upside potential. The absence of earnings call data and corporate events means these factors do not influence the score.

Positive Factors

Diversified product and end-market exposure

Toray’s broad portfolio across fibers, plastics, carbon-fiber composites and water-treatment solutions supplies apparel, automotive, aerospace, electronics and infrastructure. This diversification reduces reliance on any single cycle and anchors demand across structurally different markets over the medium term.

Solid balance sheet and moderate leverage

A 51.23% equity ratio and debt/equity around 0.54 provide financial flexibility to fund R&D and capex for higher-value segments like carbon fiber. Moderate leverage lowers refinancing risk and supports strategic investments and resilience through industry cycles over the coming months.

Sustained gross margin and operational profitability

A near 19.8% gross margin and positive EBIT/EBITDA margins indicate structural cost control and a meaningful share of value-added products. That margin base helps preserve earnings power while shifting sales mix toward specialty materials and higher-margin composite applications over the medium term.

Negative Factors

Declining free cash flow and weak cash conversion

FCF down -15.72% TTM with operating cash flow only 0.28x net income and FCF 0.23x net income signals persistent cash generation weakness. This constrains self-funding of capex, dividends, or debt paydown and limits strategic optionality over the next several quarters.

Negative revenue growth trend

Top-line has contracted (recent 3M -2.18% and TTM ~-0.71%), suggesting demand softness or competitive pressure. Continued revenue stagnation hampers scale benefits and makes it harder to absorb fixed costs while investing in higher-margin growth areas like composites.

Low return on equity

ROE near 3.95% indicates limited returns on shareholder capital and potential inefficiencies in asset utilization or capital allocation. Over months this can restrict the company’s ability to generate shareholder value and may pressure management to improve operational productivity.

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

Toray Industries presents a mixed financial picture. The income statement shows stable profitability but lacks revenue growth, which could impact future performance. The balance sheet is strong with moderate leverage, but the low ROE suggests inefficiencies. The cash flow statement is concerning with declining free cash flow and moderate cash conversion efficiency. Overall, while the company maintains stability, it faces challenges in growth and cash generation.

Income Statement

Toray Industries shows a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) data indicates a slight decline in revenue growth at -0.71%, reflecting potential market challenges. However, the company maintains a stable gross profit margin of approximately 19.83% and a net profit margin of 2.70%, indicating efficient cost management. The EBIT and EBITDA margins are moderate, suggesting operational efficiency but room for improvement. Overall, while profitability is stable, the lack of revenue growth is a concern.

Balance Sheet

The balance sheet of Toray Industries reflects a solid equity position with a debt-to-equity ratio of 0.54, indicating moderate leverage. The return on equity (ROE) is 3.95%, which is relatively low, suggesting limited returns on shareholder investments. The equity ratio stands at 51.23%, showing a strong equity base. Overall, the balance sheet is stable, with manageable debt levels, but the low ROE indicates potential inefficiencies in generating returns.

Cash Flow

Toray Industries' cash flow statement reveals challenges in cash generation. The free cash flow growth rate is negative at -15.72% TTM, indicating declining cash reserves. The operating cash flow to net income ratio is 0.28, suggesting moderate cash conversion efficiency. The free cash flow to net income ratio is 0.23, highlighting limited free cash flow relative to net income. Overall, the cash flow position is concerning, with declining free cash flow and moderate cash conversion efficiency.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.50T	2.56T	2.46T	2.49T	2.23T	1.88T
Gross Profit	498.18B	505.89B	443.52B	420.83B	435.97B	377.50B
EBITDA	243.86B	267.64B	197.91B	242.65B	227.59B	176.45B
Net Income	59.32B	77.91B	21.90B	72.82B	84.23B	45.79B
Balance Sheet
Total Assets	3.35T	3.29T	3.47T	3.19T	3.04T	2.85T
Cash, Cash Equivalents and Short-Term Investments	228.06B	237.29B	235.89B	224.00B	229.30B	236.35B
Total Debt	896.19B	842.66B	949.68B	950.09B	935.66B	973.93B
Total Liabilities	1.52T	1.47T	1.62T	1.56T	1.54T	1.53T
Stockholders Equity	1.72T	1.71T	1.74T	1.54T	1.41T	1.24T
Cash Flow
Free Cash Flow	48.76B	75.78B	51.55B	43.00B	46.09B	89.11B
Operating Cash Flow	232.44B	255.03B	185.68B	145.21B	138.29B	211.59B
Investing Cash Flow	-81.77B	-63.20B	-121.00B	-102.72B	-57.17B	-97.87B
Financing Cash Flow	-159.66B	-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: Positive
• RSI: Neutral
• STOCH: Neutral

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 1122.63, above the 50-day MA of 1057.63, and above the 200-day MA of 987.84, indicating a bullish trend. The MACD of 23.50 indicates Positive momentum. The RSI at 61.14 is Neutral, neither overbought nor oversold. The STOCH value of 50.34 is Neutral, 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
3104	75 Outperform	¥95.52B	19.12	―	1.79%	10.76%	54.82%
3201	74 Outperform	¥114.32B	14.07	―	2.66%	7.56%	-17.12%
3110	73 Outperform	¥539.94B	37.75	11.10%	0.99%	9.49%	55.64%
3109	72 Outperform	¥13.39B	14.40	―	4.80%	4.49%	26.84%
3002	66 Neutral	¥146.54B	55.56	2.34%	3.38%	>-0.01%	-49.83%
3402	65 Neutral	¥1.68T	29.71	3.37%	1.85%	-2.18%	26.45%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Toray Industries Corporate Events

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.

Toray Industries to Repurchase and Cancel Shares to Boost Capital Efficiency

Toray Industries, Inc. has announced a strategic move to repurchase and cancel a significant portion of its common stock, aligning with its policy to enhance capital efficiency by reducing cross-shareholdings. This initiative, set to take place between November 2025 and May 2026, involves repurchasing up to 63 million shares and cancelling 127 million shares, aiming to optimize shareholder value and streamline its capital structure.

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.

Toray Industries Reports Decline in Financial Results but Plans Share Repurchase

Toray Industries reported a decline in its consolidated financial results for the six months ended September 30, 2025, with revenue dropping by 4.6% and profit attributable to owners decreasing by 32.5% compared to the previous year. Despite the decline, the company announced a slight increase in its annual dividend forecast and plans for a share repurchase, indicating a strategic effort to enhance shareholder value.

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.