Nippon Paper (3863) AI Stock Analysis

• Market Cap: ¥128.94B
• Dividend Yield: 1.34%
• Average Volume (3M): 406.22K
• Price to Earnings (P/E): 7.3
• Beta (1Y): 0.51
• Revenue Growth: 1.64%
• EPS Growth: -10.74%
• Country: JP
• Employees: 15,557
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -9.96
• Shares Outstanding: 116,254,900
• 10 Day Avg. Volume: 354,730
• 30 Day Avg. Volume: 406,223
• PEG Ratio: -0.32
• Price to Book (P/B): 0.24
• Price to Sales (P/S): 0.10
• P/FCF Ratio: 5.36
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 88.12
• Revenue Forecast (FY): ¥1.20T

• Rating: 62 Neutral
• Price Target: ¥1,258.00 ▲(7.61% Upside)

Nippon Paper's overall stock score reflects stable financial performance with some risks due to high leverage and declining free cash flow. Technical indicators suggest a lack of momentum, and valuation metrics indicate moderate pricing. The absence of earnings call data and corporate events limits further insights.

Positive Factors

Diverse Revenue Streams

The company's diverse revenue streams, including paper products and renewable energy, provide stability and reduce dependency on a single market segment, enhancing long-term resilience.

Sustainable Practices

Nippon Paper's commitment to sustainable forestry and environmental initiatives aligns with global trends towards sustainability, potentially improving brand image and regulatory compliance.

Strategic Partnerships

Strategic partnerships enhance market position and operational efficiency, providing competitive advantages and fostering long-term growth opportunities.

Negative Factors

High Leverage

High leverage poses financial risks, especially in adverse economic conditions, potentially impacting the company's ability to invest in growth and manage cash flow.

Declining Free Cash Flow

A decline in free cash flow suggests potential challenges in cash generation, which could limit the company's ability to fund operations and invest in future growth.

Low Net Profit Margin

A low net profit margin indicates challenges in controlling expenses, which can affect profitability and limit financial flexibility over the long term.

Nippon Paper Business Overview & Revenue Model

Company Description

Nippon Paper Industries Co., Ltd. engages in paper manufacturing and related businesses in Japan and internationally. It offers newsprint, printing and writing, and business communication papers; household paper products, including facial and bath tissues, paper towel, pre-moistened and industrial-use wipes, personal-care product; adult diapers and underwear; wrap and kitchen paper products; wrapping paper, paperboards, paper packs, linerboard and corrugated medium, and converting paper products; wet non-woven fabric and wasa green products; and functionality specialty paper products. The company also provides cartons, filling machines, and maintenance services; kraft and dissolving pulp, functional chemicals and coating resins, and functional films; carbon-free fly ash concrete admixture products; logs and lumber products, and building materials; and cellulose nanofibers. In addition, it is involved in energy, agricultural, warehouse, and transport businesses; and the operation of sports clubs and leisure facilities. Nippon Paper Industries Co., Ltd. was founded in 1949 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nippon Paper generates revenue primarily through the sale of its paper products, which include a wide range of printing and writing papers, packaging solutions, and specialty papers designed for various industrial applications. The company's revenue model is bolstered by its diverse product lineup that caters to different market segments, from consumer goods to industrial uses. Key revenue streams come from both domestic and international markets, with a significant portion derived from long-term contracts with major clients. Additionally, Nippon Paper has ventured into renewable energy, leveraging biomass and hydroelectric power generation, which not only supports its operations but also contributes to its revenue through energy sales. Strategic partnerships with other companies in the paper and forestry sectors further enhance its market position and operational efficiency.

Nippon Paper Financial Statement Overview

Summary

Nippon Paper demonstrates stable revenue growth and reasonable gross margins, though profitability is constrained by high expenses or financial commitments. The balance sheet indicates significant leverage, which may heighten financial risk. Cash flow generation is solid, but a declining free cash flow suggests possible future liquidity challenges. Overall, the financial position is stable but with notable risks that could affect long-term sustainability.

Income Statement

Nippon Paper showed a modest revenue growth of 1.3% from 2024 to 2025, indicating stability in revenue generation. The gross profit margin in 2025 was 16.1%, showing a consistent ability to maintain profit from sales. However, the net profit margin decreased significantly to 0.4%, reflecting challenges in controlling expenses or other financial commitments. EBIT and EBITDA margins were relatively low at 1.7% and 7.6% respectively, suggesting limited operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is 1.81, indicating a substantial reliance on debt financing, which could pose risks in adverse economic conditions. The return on equity in 2025 was 0.9%, displaying limited effectiveness in generating returns for shareholders. The equity ratio stood at 28.3%, suggesting a moderate level of assets funded by equity.

Cash Flow

Nippon Paper's free cash flow decreased by 24.1% from 2024 to 2025, indicating potential challenges in cash generation. The operating cash flow to net income ratio was strong at 16.0, reflecting good cash conversion from profits. The free cash flow to net income ratio of 4.8 indicates limited free cash flow relative to net income.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.19T	1.18T	1.17T	1.15T	1.05T	1.01T
Gross Profit	194.06B	191.06B	181.40B	144.40B	173.07B	203.65B
EBITDA	90.84B	89.64B	106.70B	33.71B	82.71B	83.73B
Net Income	7.53B	4.54B	22.75B	-50.41B	1.99B	3.20B
Balance Sheet
Total Assets	1.67T	1.70T	1.73T	1.67T	1.64T	1.55T
Cash, Cash Equivalents and Short-Term Investments	153.08B	185.94B	164.86B	144.35B	136.84B	69.73B
Total Debt	845.26B	874.93B	882.91B	902.23B	877.96B	808.86B
Total Liabilities	1.18T	1.19T	1.24T	1.25T	1.20T	1.12T
Stockholders Equity	468.73B	482.03B	468.79B	394.65B	426.93B	412.37B
Cash Flow
Free Cash Flow	0.00	21.72B	28.62B	-23.53B	12.70B	22.72B
Operating Cash Flow	0.00	72.79B	90.28B	65.82B	72.38B	84.20B
Investing Cash Flow	0.00	-33.44B	-22.03B	-68.02B	-61.25B	-182.94B
Financing Cash Flow	0.00	-18.27B	-46.57B	6.98B	54.31B	113.70B

Nippon Paper Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1169.00
• 50DMA: Negative
• 100DMA: Negative
• 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 Neutral. The current price of 1169 is above the 20-day moving average (MA) of 1101.60, above the 50-day MA of 1120.62, and above the 200-day MA of 1098.28, indicating a neutral trend. The MACD of 1.07 indicates Negative momentum. The RSI at 52.09 is Neutral, neither overbought nor oversold. The STOCH value of 69.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3863.

Nippon Paper Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8032	75 Outperform	¥76.96B	36.62	―	3.21%	4.06%	-73.92%
3865	66 Neutral	¥147.89B	12.73	4.52%	2.73%	-0.03%	120.35%
3864	64 Neutral	¥28.67B	8.58	3.95%	2.33%	-10.04%	43.13%
3863	62 Neutral	¥128.94B	7.30	3.57%	1.34%	1.64%	-10.74%
3861	62 Neutral	¥844.06B	24.89	2.87%	3.52%	3.91%	-22.16%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
3880	59 Neutral	¥153.75B	-46.06	-1.54%	1.51%	-2.89%	-15.89%

Nippon Paper Corporate Events

Nippon Paper Revises Dividend Forecast for FY 2026

Nippon Paper Industries announced a correction to its previously released consolidated financial results for the six months ended September 30, 2025. The correction involves an update to the cash dividends forecast for the fiscal year ending March 31, 2026, with the total annual dividend per share forecasted to increase from 10.00 yen to 15.00 yen, reflecting a positive adjustment for stakeholders.

Nippon Paper Industries Reports Improved Profits Amidst Challenges

Nippon Paper Industries reported its consolidated financial results for the six months ending September 30, 2025, showing a slight increase in net sales by 0.8% year-on-year. The company experienced significant growth in operating and ordinary profits, with increases of 338% and 377.5% respectively, compared to the same period last year. Despite these improvements, the comprehensive income was negative, indicating ongoing challenges. The company also announced a revision in its financial forecast for the fiscal year ending March 31, 2026, projecting a 1.5% increase in net sales and a substantial rise in profit attributable to owners of the parent by 120.3%. This suggests a positive outlook for the company’s financial health and potential benefits for stakeholders.