Nippon Paper (3863) AI Stock Analysis

• Market Cap: $130.21B
• Dividend Yield: 0.89%
• Average Volume (3M): 530.11K
• Price to Earnings (P/E): 28.7
• Beta (1Y): 0.46
• Revenue Growth: 1.30%
• EPS Growth: -80.06%
• Country: JP
• Employees: 15,557
• Sector: Basic Materials
• Sector Strength: 73
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): 38.83
• Shares Outstanding: 116,254,900
• 10 Day Avg. Volume: 641,310
• 30 Day Avg. Volume: 530,113
• PEG Ratio: <0.01
• Price to Book (P/B): 0.30
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -5.02
• 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: $1,030.37
• Price Target Upside: -8.57% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

• Rating: 62 Neutral
• Price Target: ¥1,089.00 ▼(-3.37%Downside)

Nippon Paper's overall score is driven by stable financial performance with a solid cash flow conversion, though offset by high leverage and declining free cash flow. Technical analysis indicates bearish momentum, with the stock trading below key moving averages. Valuation metrics suggest the stock may be overvalued, with a high P/E ratio and low dividend yield, contributing to a moderate overall investment appeal.

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 Industries generates revenue primarily through the production and sale of its diverse range of paper products. The company has several key revenue streams, including the sale of printing and writing paper used in books, newspapers, and office supplies, and packaging materials such as corrugated containers and paperboards. Additionally, Nippon Paper earns income from household paper products like tissues and toilet paper, which are staples in both domestic and international markets. The company also capitalizes on its chemical products division, which produces chemicals derived from wood and paper processing, further diversifying its income sources. Nippon Paper's earnings are bolstered by strategic partnerships and investments in sustainable and innovative technologies, which enhance its product offerings and appeal to environmentally conscious consumers.

Nippon Paper Financial Statement Overview

Summary

Nippon Paper shows stable revenue growth and reasonable gross margins, though profitability is constrained by high expenses or financial commitments. The balance sheet indicates significant leverage, posing financial risk, while cash flow generation is solid but declining, suggesting potential future liquidity challenges.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	1.18T	1.18T	1.17T	1.15T	1.05T	1.01T
Gross Profit	189.76B	191.06B	181.40B	144.40B	173.07B	203.65B
EBITDA	72.76B	89.64B	106.70B	33.71B	79.66B	84.93B
Net Income	31.10B	4.54B	22.75B	-50.41B	1.99B	3.20B
Balance Sheet
Total Assets	1.71T	1.70T	1.73T	1.67T	1.64T	1.55T
Cash, Cash Equivalents and Short-Term Investments	151.21B	185.94B	164.86B	144.35B	136.84B	69.73B
Total Debt	857.76B	874.93B	882.91B	902.23B	877.96B	808.86B
Total Liabilities	1.22T	1.19T	1.24T	1.25T	1.20T	1.12T
Stockholders Equity	467.56B	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: Positive
• Last Price: 1127.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 1127 is above the 20-day moving average (MA) of 1034.25, above the 50-day MA of 1044.72, and above the 200-day MA of 960.92, indicating a bullish trend. The MACD of 8.91 indicates Negative momentum. The RSI at 73.21 is Negative, neither overbought nor oversold. The STOCH value of 78.40 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
3863	62 Neutral	$130.21B	28.66	0.90%	0.89%	1.30%	-80.06%
Sector *	44 Neutral	C$979.29M	-6.67	-13.73%	2.43%	17.55%	-32.57%
MPX		€167.19M	6.04	4.96%	2.31%	―	―
OJIPF		$5.09B	16.55	4.18%	0.02%	―	―
HPE		€1.00B	10.46	5.99%	2.14%	―	―
DPR		€828.76M	―	-4.63%	1.63%	―	―
8032	77 Outperform	¥95.59B	10.45		3.89%	3.80%	-22.03%

Nippon Paper Corporate Events

Nippon Paper Industries Focuses on Capital Cost and Stock Price Management

Nippon Paper Industries Co. Ltd. has announced its ongoing efforts to enhance corporate value by focusing on management strategies that consider the cost of capital and stock price. The company’s Board of Directors has recently evaluated its current financial indicators and updated its strategies to improve these metrics, as part of its Medium-Term Management Plan 2025.

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 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.