Nippon Paper (3863) AI Stock Analysis

• Market Cap: $127.78B
• Dividend Yield: 0.85%
• Average Volume (3M): 667.45K
• Price to Earnings (P/E): 27.2
• Beta (1Y): 0.48
• Revenue Growth: 1.30%
• EPS Growth: -80.06%
• Country: JP
• Employees: 15,557
• Sector: Basic Materials
• Sector Strength: 67
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): 38.83
• Shares Outstanding: 116,254,900
• 10 Day Avg. Volume: 588,390
• 30 Day Avg. Volume: 667,446
• PEG Ratio: 0.07
• Price to Book (P/B): 0.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: $899.68
• Price Target Upside: -15.84% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

• Rating: 63 Neutral
• Price Target: ¥1,119.00 ▲(4.68%Upside)

Nippon Paper's overall stock score is driven primarily by stable but risk-laden financial performance and neutral technical indicators. Valuation metrics suggest the stock may be overvalued, with limited dividend yield, leading to a cautious outlook. The absence of earnings call guidance and corporate events limits additional insights into future prospects.

Nippon Paper Business Overview & Revenue Model

Company Description

Nippon Paper Industries Co., Ltd. (3863) is a leading Japanese company engaged in the production and distribution of paper products, both domestically and internationally. The company operates through various segments including paper and paperboard, packaging, and household tissue products. Nippon Paper is also involved in the production of chemical products and the development of energy resources, leveraging its extensive expertise in forestry and biomass utilization. The company is committed to sustainable practices, utilizing renewable resources and reducing its environmental impact.

How the Company Makes Money

Nippon Paper Industries generates revenue primarily through the sale of its diverse range of paper and paper-related products. The company's key revenue streams include the sale of printing and communication papers, packaging materials, and household tissue products. Additionally, Nippon Paper is involved in the production of chemical products such as functional films and dissolving pulp, which contribute to its earnings. The company also benefits from its energy business, which includes the sale of electricity generated from biomass and other renewable sources. Strategic partnerships with other companies and a focus on sustainable forestry management further support Nippon Paper's revenue generation by ensuring a steady supply of raw materials and expanding its market reach.

Nippon Paper Financial Statement Overview

Summary

Nippon Paper has shown strong revenue growth and improved profitability. However, high leverage and fluctuating cash flows present financial risks, despite effective equity utilization.

Income Statement

Nippon Paper's income statement shows a solid recovery in profitability with a TTM gross profit margin of 16.09% and a net profit margin of 2.64%. The company has demonstrated strong revenue growth of 11.54% from 2022 to 2023, and EBIT and EBITDA margins of 1.62% and 6.17% respectively in the TTM. This indicates improved operational efficiency, though net profit margins remain relatively low.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.83, indicating substantial leverage, which poses potential financial risk. However, the company's return on equity stands at a robust 6.65%, reflecting effective use of equity capital. The equity ratio is 27.26%, suggesting a moderate level of equity financing relative to total assets, providing a balance between risk and stability.

Cash Flow

Cash flow analysis is constrained by missing TTM data, but annual data indicates volatile free cash flow trends with a decrease from 2021 to 2023. The operating cash flow to net income ratio was 3.97 in 2023, reflecting strong cash generation relative to net income. However, negative free cash flow in some years suggests potential liquidity challenges.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
1.18T	1.17T	1.15T	1.05T	1.01T	1.04T
	Gross Profit
189.76B	181.40B	144.40B	173.07B	203.65B	211.76B
	EBIT
19.05B	17.27B	-26.86B	12.09B	19.23B	35.05B
	EBITDA
72.76B	106.70B	33.71B	79.66B	84.93B	95.59B
	Net Income Common Stockholders
31.10B	22.75B	-50.41B	1.99B	3.20B	14.21B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
73.00B	164.86B	144.35B	136.84B	69.73B	52.85B
	Total Assets
1.50T	1.73T	1.67T	1.64T	1.55T	1.36T
	Total Debt
826.98B	882.91B	902.23B	877.96B	808.86B	686.40B
	Net Debt
753.98B	718.05B	757.88B	741.12B	739.12B	633.55B
	Total Liabilities
1.13T	1.24T	1.25T	1.20T	1.12T	976.89B
	Stockholders Equity
372.96B	468.79B	394.65B	426.93B	412.37B	375.23B
Cash Flow		Free Cash Flow
0.00	28.62B	-23.53B	12.70B	22.72B	-640.00M
	Operating Cash Flow
0.00	90.28B	65.82B	72.38B	84.20B	67.04B
	Investing Cash Flow
0.00	-22.03B	-68.02B	-61.25B	-182.94B	-70.11B
	Financing Cash Flow
0.00	-46.57B	6.98B	54.31B	113.70B	-7.40B

Nippon Paper Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1069.00
• 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:3863, the sentiment is Positive. The current price of 1069 is above the 20-day moving average (MA) of 1048.20, above the 50-day MA of 1044.80, and above the 200-day MA of 943.65, indicating a bullish trend. The MACD of 6.20 indicates Negative momentum. The RSI at 53.25 is Neutral, neither overbought nor oversold. The STOCH value of 65.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3863.

Nippon Paper Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3861	73 Outperform	$681.41B	14.53	4.18%	3.44%	9.02%	-7.71%
8032	70 Outperform	¥89.49B	9.78		4.16%	3.80%	-22.03%
3864	66 Neutral	€28.89B	6.42	4.96%	2.42%	-9.06%	4.05%
3863	63 Neutral	$127.78B	27.18	0.90%	0.85%	1.30%	-80.06%
3865	60 Neutral	€168.22B	10.80	5.99%	2.22%	2.92%	84.86%
3880	54 Neutral	€137.15B	―	-4.63%	1.78%	-0.41%	-348.23%
Sector *	51 Neutral	$2.02B	-1.12	-21.36%	3.65%	2.87%	-30.54%

Nippon Paper Corporate Events

Nippon Paper Announces Withdrawal of Shareholder Proposal

Nippon Paper Industries Co., Ltd. has announced the withdrawal of a shareholder proposal initially set for discussion at the upcoming General Meeting of Shareholders. The proposal involved amendments to the Articles of Incorporation concerning the sale and verification of cross-held shares. The withdrawal indicates a resolution between the company and the proposing shareholder, potentially stabilizing shareholder relations and maintaining focus on the company’s strategic objectives.

The most recent analyst rating on (JP:3863) stock is a Hold with a Yen1050.00 price target. To see the full list of analyst forecasts on Nippon Paper stock, see the JP:3863 Stock Forecast page.

Nippon Paper Unveils Growth Strategies with a Focus on Sustainability

Nippon Paper has announced its strategies for future growth, emphasizing green strategies and expanding its forestry and wood businesses. The company aims to improve financial stability by reducing cross-shareholdings and enhancing the profitability of its daily-life products and paper businesses, which could strengthen its market position and benefit stakeholders.

The most recent analyst rating on (JP:3863) stock is a Hold with a Yen1050.00 price target. To see the full list of analyst forecasts on Nippon Paper stock, see the JP:3863 Stock Forecast page.

Nippon Paper Industries Reports Resilient FY2025/3 Financial Results

Nippon Paper Industries reported a year-on-year increase in net sales and operating income for FY2025/3, driven by strong performances in the domestic Daily-Life Products and Energy businesses. Despite impairment losses from plant shutdowns, net income exceeded forecasts due to strategic asset sales, indicating a resilient financial strategy amidst operational challenges.

The most recent analyst rating on (JP:3863) stock is a Hold with a Yen1050.00 price target. To see the full list of analyst forecasts on Nippon Paper stock, see the JP:3863 Stock Forecast page.

Nippon Paper Reports Fiscal Year 2025 Financial Discrepancies

Nippon Paper Industries has reported a discrepancy between its forecasted and actual financial results for the fiscal year ending March 2025. The company experienced a lower-than-expected net sales and operating profit but saw a significant increase in profit attributable to owners due to extraordinary income from the return of retirement benefits trust and asset sales. However, an impairment loss was recognized due to restructuring efforts at its subsidiary, Paper Australia Pty Ltd, impacting the overall financial performance.

The most recent analyst rating on (JP:3863) stock is a Hold with a Yen1050.00 price target. To see the full list of analyst forecasts on Nippon Paper stock, see the JP:3863 Stock Forecast page.

Nippon Paper Industries Reports Fiscal Year 2025 Financial Results and Positive Outlook for 2026

Nippon Paper Industries reported its consolidated financial results for the fiscal year ending March 31, 2025, showing a slight increase in net sales by 1.3% to ¥1,182,431 million. However, the profit attributable to owners of the parent decreased significantly by 80% to ¥4,539 million. The company anticipates a positive outlook for the fiscal year ending March 31, 2026, with expected increases in net sales, operating profit, and ordinary profit, which could potentially improve its market position and benefit stakeholders.

The most recent analyst rating on (JP:3863) stock is a Hold with a Yen1050.00 price target. To see the full list of analyst forecasts on Nippon Paper stock, see the JP:3863 Stock Forecast page.

Nippon Paper Opposes Shareholder Proposal on Cross-Held Shares

Nippon Paper Industries’ Board of Directors has decided to oppose a shareholder proposal that suggests amendments to the Articles of Incorporation regarding the sale and verification of cross-held shares. The company emphasizes its strategic policy of holding stocks deemed necessary for business strategy and relationships, and has been actively reducing its cross-shareholdings. They aim to eliminate all cross-shareholdings, targeting a reduction of listed shares by 15 billion yen over the next three years, reflecting a commitment to align with shareholder and investor feedback.

The most recent analyst rating on (JP:3863) stock is a Sell with a Yen900.00 price target. To see the full list of analyst forecasts on Nippon Paper stock, see the JP:3863 Stock Forecast page.

Nippon Paper Industries to Eliminate Cross-Shareholdings for Sustainable Growth

Nippon Paper Industries has announced a strategic initiative to reduce its cross-shareholdings, aiming to eliminate them in principle. This move is intended to enhance corporate value and support sustainable growth, with funds from the reduction being reinvested into growth and environmental projects.

The most recent analyst rating on (JP:3863) stock is a Sell with a Yen900.00 price target. To see the full list of analyst forecasts on Nippon Paper stock, see the JP:3863 Stock Forecast page.