Tosoh (4042) AI Stock Analysis

• Market Cap: ¥868.55B
• Dividend Yield: 4.21%
• Average Volume (3M): 1.42M
• Price to Earnings (P/E): 25.4
• Beta (1Y): 0.73
• Revenue Growth: -1.21%
• EPS Growth: -27.21%
• Country: JP
• Employees: 14,394
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 54.73
• Shares Outstanding: 325,080,960
• 10 Day Avg. Volume: 1,159,440
• 30 Day Avg. Volume: 1,423,120
• PEG Ratio: 9.67
• Price to Book (P/B): 0.79
• Price to Sales (P/S): 0.62
• P/FCF Ratio: 24.82
• 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): 122.64
• Revenue Forecast (FY): ¥1.03T

• Rating: 68 Neutral
• Price Target: ¥2,835.00 ▲(17.51% Upside)
• Action: Downgraded Date: 02/07/26
• Date: Action: Downgraded 02/07/26

The score is driven mainly by pressured recent financial performance (sharp TTM revenue decline and lower net margin) offset by a conservative balance sheet and improving—though historically volatile—cash generation. Technically, the stock’s uptrend and positive momentum indicators support the rating, while valuation is helped by a solid dividend yield but tempered by a ~23.7 P/E.

Positive Factors

Conservative balance sheet

Low leverage and a sizable equity base give Tosoh financial resilience across cycles. Conserved balance-sheet capacity supports capital spending, dividend continuity, and optionality for M&A or buybacks without forcing distress asset sales when cyclical chemicals demand softens.

Diversified product & end-market mix

A mix of commodity/petrochemical lines plus specialty polymers and life-science consumables reduces single-market dependence. Stable healthcare and analytical consumables provide recurring demand that cushions cyclical volatility from bulk chemicals, supporting steadier midterm revenue streams.

Improving cash generation

Recent positive OCF and strong FCF growth improve internal funding for capex, R&D and shareholder returns. While conversion isn't perfect, sustained positive FCF increases strategic flexibility to invest in higher-margin specialty segments or to strengthen the balance sheet over the next several quarters.

Negative Factors

Sharp revenue decline

A pronounced revenue drop and compressed net margin indicate weakened demand or pricing pressure in core businesses. Persistent top-line contraction can erode fixed-cost absorption, strain margins and limit cash generation, making durable recovery dependent on structural demand or price improvements.

Volatile cash flow conversion

Inconsistent cash conversion and episodes of negative OCF/FCF reduce predictability of funding for capex, dividends and strategic projects. This volatility raises execution risk and complicates planning, particularly if cyclical downturns recur or working capital swings widen.

Cyclicality and input-cost exposure

Core chemicals are sensitive to feedstock, energy cost swings and utilization rates. Such structural exposure means margins can deteriorate quickly when spreads compress or utilization falls, limiting durability of earnings absent a shift toward higher-margin, less cyclic specialty sales.

Tosoh Business Overview & Revenue Model

Company Description

Tosoh Corporation manufactures and sells basic chemicals, petrochemicals, specialty products, and fine chemicals worldwide. It operates through four segments: Petrochemical, Chlor-Alkali, Specialty, and Engineering. The company provides materials, including battery, fabricated quartzware, silica glass, thin film depositions, zeolites for catalysts and molecular sieves, zirconia injection mold components and compounds, zirconia grinding and dispersion media, and zirconia fine beads and powders. It also offers chromatographic columns, and media and diagnostic systems; clinical diagnostic systems; Portland cement and blast-furnace slag cement; and caustic soda, vinyl chloride monomer, calcium hypochlorite, and sodium bicarbonate. In addition, the company provides ethylene, propylene, C4 fraction, tertiary butyl alcohol, cumene, and aromatic compounds; and ethyleneamines, bromine, hydrobromic acids, flame retardants, non-aqueous solvents, chelating agents, ethylene dichloride, and sodium styrenesulfonate. Further, it offers polymers, such as ethylene vinyl-acetate copolymers, adhesive polymers, low and high-density polyethylene products, synthetic rubbers, functional polymers, and polyvinyl chloride pastes; and polyurethanes (PU), including methylene diphenyl diisocyanate, toluene diisocyanate, hexamethylene diisocyanate, adhesives, coating resins, elastomers, polyisocyanates for PU paints, and polyols. Additionally, it manufactures and sells water treatment systems; and engages in the construction and repair businesses. It also offers logistics, analytic, personnel management, and information technology services.

How the Company Makes Money

Tosoh generates revenue primarily through the sale of its chemical products across different sectors. The company's key revenue streams include the production and distribution of specialty chemicals, petrochemicals, and advanced materials, which are utilized in various industries such as electronics and healthcare. Significant partnerships with other companies in the chemical and electronics sectors enhance its market reach and product development capabilities. Additionally, Tosoh capitalizes on its research and development efforts to create high-value products that meet the evolving needs of its customers, contributing to its overall earnings.

Tosoh Financial Statement Overview

Summary

Financials are mixed: the balance sheet is a stabilizer with conservative leverage (debt-to-equity ~0.26), but TTM fundamentals have weakened with a sharp revenue decline and compressed net margin (~3.3% vs ~5–6% previously). Cash flow has turned positive with strong TTM free-cash-flow growth (+43%), yet conversion is moderate (~46% of net income) and historical volatility (notably FY2023 negative OCF/FCF) lowers confidence in consistency.

Income Statement

In TTM (Trailing-Twelve-Months), revenue is down sharply (about -108%), and profitability has compressed versus recent annual periods: net margin is ~3.3% in TTM versus ~5–6% in FY2024–FY2025. That said, underlying operating profitability remains positive (EBIT margin ~7.9%, EBITDA margin ~12.6%), and margins are still well above the trough seen earlier in the cycle, but the latest trajectory points to a weaker demand/price environment and earnings volatility.

Balance Sheet

Leverage looks conservative for the sector, with debt-to-equity around ~0.26 in TTM (and ~0.22 in FY2025), supported by a sizable equity base. Returns are positive but modest in the latest period (about 5% return on equity in TTM versus ~7% in FY2024–FY2025), suggesting profitability has cooled even though balance-sheet risk remains contained.

Cash Flow

Cash generation improved recently: TTM operating cash flow is positive and free cash flow is also positive, with strong TTM free-cash-flow growth (+43%). However, cash conversion is not particularly strong versus earnings (free cash flow is ~46% of net income in TTM), and results have been volatile historically (notably negative operating and free cash flow in FY2023), which tempers confidence in consistency through the cycle.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	1.02T	1.06T	1.01T	1.06T	918.58B	732.85B
Gross Profit	257.11B	259.01B	226.23B	219.18B	272.02B	204.39B
EBITDA	129.45B	151.69B	140.48B	126.11B	201.40B	136.86B
Net Income	34.11B	58.00B	57.32B	50.34B	107.94B	63.28B
Balance Sheet
Total Assets	1.34T	1.33T	1.29T	1.19T	1.09T	982.78B
Cash, Cash Equivalents and Short-Term Investments	136.43B	141.55B	149.81B	120.15B	161.52B	149.16B
Total Debt	208.33B	179.10B	176.34B	176.73B	91.91B	126.53B
Total Liabilities	460.78B	424.88B	431.19B	400.06B	327.94B	321.10B
Stockholders Equity	803.30B	827.11B	794.56B	738.89B	709.09B	615.78B
Cash Flow
Free Cash Flow	60.13B	26.35B	58.26B	-95.86B	64.13B	44.95B
Operating Cash Flow	131.97B	106.24B	116.97B	-16.24B	108.61B	95.11B
Investing Cash Flow	-69.39B	-81.57B	-59.94B	-78.73B	-43.52B	-46.35B
Financing Cash Flow	-55.98B	-37.92B	-31.22B	50.17B	-57.85B	1.58B

Tosoh Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2412.50
• 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:4042, the sentiment is Positive. The current price of 2412.5 is below the 20-day moving average (MA) of 2637.97, below the 50-day MA of 2524.27, and above the 200-day MA of 2279.99, indicating a bullish trend. The MACD of 47.26 indicates Negative momentum. The RSI at 65.71 is Neutral, neither overbought nor oversold. The STOCH value of 84.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4042.

Tosoh 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%
4042	68 Neutral	¥868.55B	25.35	4.79%	4.21%	-1.21%	-27.21%
3407	68 Neutral	¥2.51T	15.94	7.48%	2.89%	3.55%	95.65%
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 *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4061	60 Neutral	¥317.04B	-33.94	-4.00%	3.71%	0.24%	-234.36%

Tosoh Corporate Events

Tosoh Cuts Full-Year Outlook as Nine-Month Profit Nearly Halves

Tosoh reported a weaker performance for the nine months to December 31, 2025, with net sales down 5.0% year-on-year to ¥756.1 billion and operating income declining 6.3% to ¥69.9 billion, while income attributable to owners of the parent fell sharply by 49.2% to ¥24.6 billion, resulting in basic earnings per share dropping to ¥77.94. The company’s equity ratio eased to 59.8% from 62.3% at the previous fiscal year-end, but Tosoh maintained its dividend policy, paying an interim ¥50 per share and forecasting a full-year total of ¥100 per share, and it revised its full-year outlook downward to anticipate a 5.0% fall in net sales and a nearly halving of full-year profit, underscoring a more challenging earnings environment despite continued shareholder returns.

The most recent analyst rating on (JP:4042) stock is a Buy with a Yen2894.00 price target. To see the full list of analyst forecasts on Tosoh stock, see the JP:4042 Stock Forecast page.

Tosoh Lowers Full-Year Earnings Forecast on Price Declines and Weak Demand

Tosoh has cut its consolidated forecast for the fiscal year ending March 31, 2026, trimming expected net sales to ¥1.01 trillion and reducing projected operating income, ordinary income, and net income, with basic earnings per share now seen at ¥94.93, well below both its previous guidance and last year’s results. The downgrade reflects weaker market conditions for key petrochemical and chlor-alkali products, where falling selling prices and sluggish demand are outweighing the benefit of a weaker yen, as well as a slower-than-expected recovery in semiconductor-related products in the Specialty Group, pointing to softer operating performance and lower returns for shareholders than initially anticipated.

The most recent analyst rating on (JP:4042) stock is a Buy with a Yen2894.00 price target. To see the full list of analyst forecasts on Tosoh stock, see the JP:4042 Stock Forecast page.

Tosoh Advances Share Buyback, Repurchasing 884,100 Shares in January

Tosoh Corporation has continued its share buyback program, acquiring 884,100 of its own common shares on the market between January 1 and January 31, 2026, at a total cost of approximately 2.2 billion yen under a discretionary trading contract. This transaction forms part of a broader repurchase authorized by the board in August 2025 for up to 17 million shares or 25 billion yen through March 31, 2026, under which Tosoh has cumulatively purchased 9,130,500 shares for about 21.0 billion yen, signalling ongoing efforts to enhance capital efficiency and shareholder returns through active treasury share management.

The most recent analyst rating on (JP:4042) stock is a Buy with a Yen2894.00 price target. To see the full list of analyst forecasts on Tosoh stock, see the JP:4042 Stock Forecast page.

Tosoh Expands Ongoing Share Buyback, Reaching Over 8.2 Million Shares Repurchased

Tosoh Corporation has continued its share buyback program authorized by its board on August 5, 2025, acquiring 909,400 common shares on the market between December 1 and December 31, 2025 for a total of approximately ¥2.12 billion under a discretionary trading contract. This brings the cumulative execution under the current authorization to 8,246,400 shares repurchased for about ¥18.76 billion as of December 31, 2025, out of a maximum approved limit of 17 million shares and ¥25 billion through March 31, 2026, signaling an ongoing capital allocation effort that may enhance shareholder returns and support the company’s share price by reducing the free float.

The most recent analyst rating on (JP:4042) stock is a Buy with a Yen2448.00 price target. To see the full list of analyst forecasts on Tosoh stock, see the JP:4042 Stock Forecast page.

Tosoh Corporation Advances Share Buyback Strategy

Tosoh Corporation announced the acquisition of 1,869,100 of its own shares, costing approximately 4.2 billion yen, as part of a broader share buyback plan initiated in August 2025. This move is part of a strategic effort to enhance shareholder value and optimize capital structure, reflecting Tosoh’s commitment to maintaining a strong market position and delivering value to its stakeholders.

The most recent analyst rating on (JP:4042) stock is a Buy with a Yen2448.00 price target. To see the full list of analyst forecasts on Tosoh stock, see the JP:4042 Stock Forecast page.