Asahi Kasei (3407) AI Stock Analysis

• Market Cap: ¥2.51T
• Dividend Yield: 2.89%
• Average Volume (3M): 5.14M
• Price to Earnings (P/E): 15.9
• Beta (1Y): 0.84
• Revenue Growth: 3.55%
• EPS Growth: 95.65%
• Country: JP
• Employees: 49,295
• Sector: Industrials
• Sector Strength: 72
• Industry: Chemicals
• EPS (TTM): 40.03
• Shares Outstanding: 1,365,752,000
• 10 Day Avg. Volume: 5,313,380
• 30 Day Avg. Volume: 5,138,806
• PEG Ratio: 0.05
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.48
• P/FCF Ratio: 14.46
• 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: ¥1,712.00
• Price Target Upside: 41.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 104.73
• Revenue Forecast (FY): ¥3.07T

• Rating: 68 Neutral
• Price Target: ¥1,788.00 ▲(48.20% Upside)
• Action: Reiterated Date: 02/06/26
• Date: Action: Reiterated 02/06/26

The score is driven mainly by improving financial performance (revenue and margin recovery with manageable leverage), supported by a strong technical uptrend. Valuation is reasonable, while overbought momentum signals and mixed cash-flow conversion keep the score from being higher.

Positive Factors

Revenue and margin recovery

Asahi Kasei shows a durable earnings recovery: TTM revenue growth accelerated to ~19.7% and net margin rebounded to ~5.2% after a prior loss. Sustained top-line momentum and margin recovery improve long-term cash generation and reinvestment capacity across cycles.

Balance-sheet resilience

Moderate leverage (D/E ~0.59) and rising equity strengthen financial flexibility, supporting capex and M&A optionality and providing a cushion in downturns. This durability reduces refinancing risk versus peers with higher structural leverage.

Diversified, industrial-health split

A diversified business mix across Materials, Homes and Health Care smooths cyclicality and exposes the company to secular growth areas (healthcare devices, advanced materials for EV/battery markets). Diversification supports more stable long-term revenue streams.

Negative Factors

Weak cash conversion

Despite solid headline FCF in the latest TTM, cash conversion remains mediocre and volatile. Sub-50% FCF-to-income and low operating cash coverage limit internal funding for capex/dividends and increase reliance on external financing during stress periods.

Earnings cyclicality and volatility

Earnings and returns display material cyclicality tied to commodity and end-market swings. This volatility complicates long-term planning, makes sustained margin improvement uncertain, and raises the risk that future downturns could quickly erode profitability.

Feedstock and energy cost exposure

A meaningful share of revenue comes from commodity-linked materials whose margins are sensitive to feedstock and energy price swings. Structural exposure to these input cost cycles can intermittently compress margins unless pass-through mechanisms hold.

Asahi Kasei Business Overview & Revenue Model

Company Description

Asahi Kasei Corporation (3407) is a diversified Japanese company engaged in various sectors including chemicals, materials, and healthcare. Founded in 1922, the company operates through several business segments: Chemicals, Homes, and Health Care. Its core products include synthetic fibers, plastics, and advanced materials, as well as medical devices and pharmaceuticals, with a strong emphasis on innovation and sustainability.

How the Company Makes Money

Asahi Kasei generates revenue through multiple key streams across its business segments. The Chemicals segment contributes significantly, primarily through the production of synthetic fibers and engineering plastics, which are sold to various industries including automotive and consumer goods. The Homes segment generates income from the sale of residential properties and related services, leveraging its expertise in building materials and home systems. The Health Care segment earns revenue through the sale of medical devices, pharmaceuticals, and diagnostic products. Additionally, Asahi Kasei has strategic partnerships and collaborations with other companies and research institutions that enhance its product offerings and market reach, further supporting its revenue growth. The company's focus on R&D and sustainability also positions it to capitalize on emerging trends and market demands.

Asahi Kasei Financial Statement Overview

Summary

Fundamentals are improving in a recovery phase: TTM profitability is positive with faster revenue growth (19.7%) and higher net margin (~5.2%). Balance sheet leverage looks manageable (debt-to-equity ~0.59) with ROE recovering (~8.3%). Offsetting this, results and cash flows have been volatile across years and cash conversion is only moderate (FCF ~44% of net income; prior period FCF volatility).

Income Statement

Asahi Kasei’s earnings profile has improved meaningfully versus the downturn in FY2023 (net loss), with TTM (Trailing-Twelve-Months) showing positive profitability and stronger momentum. Revenue growth accelerated to 19.7% in TTM (Trailing-Twelve-Months) (vs. 9.1% in FY2025 and 2.1% in FY2024), and margins rebounded: net margin improved to ~5.2% in TTM (Trailing-Twelve-Months) from ~4.4% in FY2025 and ~1.6% in FY2024. The key weakness is that profitability is still moderate for the sector and has been volatile across cycles (strong FY2022, sharp FY2023 dip), which lowers confidence in through-cycle stability.

Balance Sheet

The balance sheet looks generally sound with moderate leverage. Debt-to-equity sits around 0.59 in TTM (Trailing-Twelve-Months), improved from FY2025 (~0.64) and broadly in line with recent history, while equity has increased versus FY2025—supporting balance-sheet resilience. Returns on equity have also recovered to ~8.3% in TTM (Trailing-Twelve-Months) from ~7.3% in FY2025 and very weak levels in FY2024, though still below the stronger FY2022 level (~9.6%). The main risk is that absolute debt remains sizable, so the company remains somewhat exposed if operating conditions weaken again.

Cash Flow

Cash generation is positive but mixed in quality. TTM (Trailing-Twelve-Months) free cash flow is solid (¥133.9B) and up strongly (+26.95%), improving from FY2025, and operating cash flow is also healthy at ¥306.9B. However, cash conversion is not particularly strong: free cash flow is ~44% of net income in TTM (Trailing-Twelve-Months), and operating cash flow coverage is only ~0.34, suggesting profits are not fully translating into operating cash in the period. Historical volatility is also notable (negative free cash flow in FY2023).

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	3.04T	3.04T	2.78T	2.73T	2.46T	2.11T
Gross Profit	987.50B	958.26B	815.97B	773.78B	769.77B	680.71B
EBITDA	428.67B	389.80B	218.49B	120.65B	366.89B	287.39B
Net Income	157.13B	135.00B	43.81B	-91.95B	161.88B	79.77B
Balance Sheet
Total Assets	4.16T	4.02T	3.66T	3.45T	3.35T	2.92T
Cash, Cash Equivalents and Short-Term Investments	440.89B	393.47B	338.11B	251.18B	244.64B	221.78B
Total Debt	1.17T	1.20T	955.56B	974.75B	777.22B	663.78B
Total Liabilities	2.08T	2.10T	1.81T	1.76T	1.63T	1.42T
Stockholders Equity	2.00T	1.86T	1.81T	1.66T	1.69T	1.47T
Cash Flow
Free Cash Flow	133.90B	99.81B	123.35B	-81.35B	13.56B	103.38B
Operating Cash Flow	306.94B	301.49B	295.30B	90.80B	183.27B	253.68B
Investing Cash Flow	-53.70B	-381.15B	-142.60B	-213.58B	-221.02B	-157.75B
Financing Cash Flow	-183.47B	144.57B	-94.33B	111.78B	42.32B	-95.87B

Asahi Kasei Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1206.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3407, the sentiment is Positive. The current price of 1206.5 is below the 20-day moving average (MA) of 1705.15, below the 50-day MA of 1548.59, and below the 200-day MA of 1234.05, indicating a bullish trend. The MACD of 78.95 indicates Negative momentum. The RSI at 68.39 is Neutral, neither overbought nor oversold. The STOCH value of 86.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3407.

Asahi Kasei Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4063	75 Outperform	¥12.17T	24.10	10.87%	2.17%	3.77%	0.35%
3407	68 Neutral	¥2.51T	15.94	7.48%	2.89%	3.55%	95.65%
4042	68 Neutral	¥868.55B	25.35	4.79%	4.21%	-1.21%	-27.21%
4188	66 Neutral	¥1.54T	17.55	1.09%	3.50%	-11.50%	25.86%
4005	65 Neutral	¥932.85B	9.58	8.79%	2.68%	-1.64%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
4004	58 Neutral	¥2.16T	74.33	1.67%	1.00%	-1.90%	-71.97%

Asahi Kasei Corporate Events

Asahi Kasei Lifts FY2025 Outlook on Pharma and Electronics Momentum

The company reported fiscal 2025 third-quarter operating income of ¥173.9 billion, up 6.2% year-on-year, driven by robust pharmaceuticals and steady housing demand, while net income rose 22.7% despite losses tied to structural changes in the materials division. Management raised full-year forecasts for the second consecutive time, now targeting record operating income of ¥259.0 billion and net income of ¥145.0 billion, supported by ongoing strength in priority businesses, a weaker yen, an increased ¥40-per-share dividend, and a ¥40 billion share repurchase underway.

The most recent analyst rating on (JP:3407) stock is a Hold with a Yen1642.00 price target. To see the full list of analyst forecasts on Asahi Kasei stock, see the JP:3407 Stock Forecast page.

Asahi Kasei lifts profit outlook on stronger nine-month earnings

The company reported ¥2.26 trillion in net sales for the first nine months of fiscal 2025 with modest top-line growth but materially higher profitability, as operating income rose 6% and net income attributable to owners climbed 23% to ¥121 billion, helped by finalized accounting for past acquisitions and stronger comprehensive income. Management maintained a ¥40 per-share dividend outlook and slightly raised full-year guidance to ¥225 billion operating income and ¥145 billion net income, while streamlining its scope by removing 21 entities, signaling tighter portfolio focus amid steady balance-sheet strengthening.

The most recent analyst rating on (JP:3407) stock is a Hold with a Yen1642.00 price target. To see the full list of analyst forecasts on Asahi Kasei stock, see the JP:3407 Stock Forecast page.

Asahi Kasei Reports No Share Buybacks Yet Under ¥40 Billion Repurchase Program

Asahi Kasei announced that under the share repurchase program authorized by its Board of Directors on November 5, 2025—allowing buybacks of up to 45 million shares or ¥40 billion through October 31, 2026—it did not repurchase any of its common stock during the period from January 1 to January 31, 2026, resulting in a cumulative buyback of zero shares and zero yen as of January 31. The absence of buybacks so far indicates that the company has not yet deployed this capital allocation tool despite having substantial authorization in place, leaving potential future repurchases and share cancellations as an unrealized lever for shareholder returns and capital structure management.

The most recent analyst rating on (JP:3407) stock is a Hold with a Yen1642.00 price target. To see the full list of analyst forecasts on Asahi Kasei stock, see the JP:3407 Stock Forecast page.

Asahi Kasei Reports No Share Buybacks Yet Under Authorized Repurchase Program

Asahi Kasei announced that, despite having an authorized share repurchase program approved by its board on November 5, 2025, the company did not repurchase any of its common stock during the period from December 1 to December 31, 2025, resulting in zero shares bought back and no funds deployed. Under the broader resolution in place through October 31, 2026, the company is permitted to repurchase up to 45 million shares, or 3.31% of its issued shares excluding treasury stock, for a maximum of ¥40 billion via discretionary trading on the Tokyo Stock Exchange, but as of December 31, 2025, no repurchases had been executed, indicating that the potential capital return and balance-sheet adjustments signaled by the program have yet to begin impacting shareholders or the company’s equity structure.

The most recent analyst rating on (JP:3407) stock is a Hold with a Yen1524.00 price target. To see the full list of analyst forecasts on Asahi Kasei stock, see the JP:3407 Stock Forecast page.