Kuraray Co (3405) AI Stock Analysis

• Market Cap: ¥478.41B
• Dividend Yield: 3.44%
• Average Volume (3M): 1.92M
• Price to Earnings (P/E): 61.7
• Beta (1Y): 0.76
• Revenue Growth: -1.94%
• EPS Growth: -84.08%
• Country: JP
• Employees: 11,941
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 27.85
• Shares Outstanding: 307,963,600
• 10 Day Avg. Volume: 1,724,690
• 30 Day Avg. Volume: 1,919,000
• PEG Ratio: -0.99
• Price to Book (P/B): 0.98
• Price to Sales (P/S): 0.91
• P/FCF Ratio: 11.22
• 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: ¥1,540.38
• Price Target Upside: -7.51% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): 83.63
• Revenue Forecast (FY): ¥818.30B

• Rating: 62 Neutral
• Price Target: ¥1,867.00 ▲(12.10% Upside)

Kuraray Co's overall stock score is driven by stable financial performance with strong operating margins and a solid balance sheet. However, technical indicators suggest bearish momentum, and the high P/E ratio indicates potential overvaluation. The dividend yield provides some support to the valuation.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.

Strong Balance Sheet

A strong balance sheet with moderate leverage provides financial stability and flexibility for future investments and growth.

Operating Margins

Sustained operating margins reflect efficient cost management and robust core operations, enhancing long-term profitability.

Negative Factors

Low Return on Equity

Low ROE suggests inefficiency in using shareholders' equity to generate profits, potentially limiting investor returns and growth.

Decline in Free Cash Flow

A decline in free cash flow can constrain the company's ability to fund new projects, pay dividends, or reduce debt, impacting future growth.

Net Profit Margin Decline

A declining net profit margin indicates rising costs or inefficiencies, which could pressure profitability and affect competitive positioning.

Kuraray Co Business Overview & Revenue Model

Company Description

Kuraray Co., Ltd. is a Japanese chemical company that specializes in the production of advanced materials and specialty chemicals. Established in 1926, Kuraray operates in various sectors including healthcare, fibers and textiles, and industrial materials. The company's core products include polyvinyl alcohol (PVA) resins, which are used in a wide range of applications such as packaging, textiles, and construction, as well as medical products and high-performance materials for various industries.

How the Company Makes Money

Kuraray generates revenue primarily through the sale of its specialty chemicals and advanced materials across multiple sectors. Its key revenue streams include the manufacturing and sale of PVA resins, which are critical in industries such as packaging and textiles, as well as medical and pharmaceutical products. The company also earns income from its investments in healthcare, including dental and medical supplies. Significant partnerships with various industrial clients and healthcare providers enhance Kuraray’s market reach and contribute to its earnings. Additionally, the company’s focus on innovation and development of new products helps to maintain competitive advantages and drive revenue growth.

Kuraray Co Financial Statement Overview

Summary

Kuraray Co shows consistent revenue growth and strong operating margins. The balance sheet is solid with moderate leverage, but low ROE suggests inefficiency in using equity. Cash flow is strong, though slight declines in free cash flow growth need attention.

Income Statement

Kuraray Co has demonstrated a consistent revenue growth trajectory with a 5.88% increase from 2023 to 2024. The gross profit margin for 2024 is 32.35%, indicating strong profitability in its core operations. However, the net profit margin declined to 3.84% in 2024 from the previous year, reflecting increased expenses or potential inefficiencies. The EBIT margin is stable at 10.29%, and the EBITDA margin is 20.60%, showcasing healthy operating performance.

Balance Sheet

The company maintains a solid equity base with an equity ratio of 59.22%, indicating a strong balance sheet. The debt-to-equity ratio is 0.32, suggesting moderate leverage and financial stability. However, the return on equity (ROE) is relatively low at 4.15%, which may indicate underutilization of equity to generate profits.

Cash Flow

Kuraray Co's free cash flow declined slightly by 2.67% from 2023 to 2024, showing some pressure on liquidity. The operating cash flow to net income ratio is 4.36, indicating strong cash generation relative to net income. However, the free cash flow to net income ratio is 2.11, suggesting less efficient translation of profits into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	815.64B	826.89B	780.94B	756.38B	629.37B	541.80B
Gross Profit	251.87B	267.52B	239.98B	241.66B	204.14B	165.41B
EBITDA	139.79B	141.17B	141.25B	144.91B	119.33B	73.03B
Net Income	15.32B	31.72B	42.45B	54.31B	37.26B	2.57B
Balance Sheet
Total Assets	1.26T	1.29T	1.25T	1.22T	1.09T	1.05T
Cash, Cash Equivalents and Short-Term Investments	115.00B	121.69B	134.62B	128.58B	155.80B	192.24B
Total Debt	265.64B	244.28B	282.02B	324.40B	307.44B	341.39B
Total Liabilities	510.32B	509.45B	518.33B	553.00B	511.41B	536.11B
Stockholders Equity	730.13B	764.28B	714.63B	647.09B	560.40B	499.13B
Cash Flow
Free Cash Flow	0.00	66.91B	68.75B	-20.93B	8.04B	-4.97B
Operating Cash Flow	0.00	138.29B	129.30B	51.73B	78.22B	79.95B
Investing Cash Flow	0.00	-76.01B	-63.15B	-68.62B	-65.59B	-64.03B
Financing Cash Flow	0.00	-82.50B	-64.96B	-12.05B	-47.45B	91.51B

Kuraray Co Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1665.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3405, the sentiment is Neutral. The current price of 1665.5 is above the 20-day moving average (MA) of 1550.85, above the 50-day MA of 1635.35, and below the 200-day MA of 1742.84, indicating a neutral trend. The MACD of -24.61 indicates Negative momentum. The RSI at 47.51 is Neutral, neither overbought nor oversold. The STOCH value of 85.76 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3405.

Kuraray Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4021	72 Outperform	¥700.00B	15.55	19.69%	3.28%	10.06%	18.03%
4004	72 Outperform	$1.13T	104.96	1.67%	1.01%	-1.90%	-71.97%
4042	71 Outperform	$715.65B	17.71	4.79%	4.27%	-1.21%	-27.21%
4005	69 Neutral	¥756.34B	8.92	8.79%	2.56%	-1.64%	―
3405	62 Neutral	¥478.41B	61.72	1.08%	3.44%	-1.94%	-84.08%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4188	54 Neutral	$1.12T	10.25	1.09%	3.67%	-11.50%	25.86%

Kuraray Co Corporate Events

Kuraray Co. to Cancel 16.9 Million Treasury Shares

Kuraray Co., Ltd. has announced the cancellation of 16,900,000 shares of its treasury stock, which represents 5.20% of its total issued and outstanding shares. This move, set to take place on November 28, 2025, is part of the company’s efforts to manage its capital structure and potentially enhance shareholder value.

Kuraray Co. Reports Decline in Nine-Month Financial Performance

Kuraray Co., Ltd. reported a decline in its financial performance for the nine months ending September 30, 2025, with net sales decreasing by 3.5% and operating income dropping by 37.3% compared to the previous year. The company’s net income attributable to owners fell by 51.1%, reflecting challenges in maintaining profitability amidst changing market conditions.

Kuraray Co. to Receive Significant Dividend from European Subsidiary

Kuraray Co., Ltd. announced it will receive a dividend from its subsidiary, Kuraray Europe GmbH, amounting to EUR 300 million in November 2025. This dividend will result in approximately JPY 51.4 billion being recorded as non-operating income in Kuraray’s unconsolidated financial results for the fiscal year ending December 31, 2025, but it will not impact the consolidated business performance.