Dentsu Inc. (JP:4324)
:4324
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Dentsu
(4324)
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Rating:46Neutral
Price Target:
¥2,683.00
▼(-21.66% Downside)
Action:ReiteratedDate:03/26/26
The score is held down primarily by volatile profitability (large FY2025 statutory loss and higher leverage after equity declined), with additional pressure from weak technicals (below key moving averages and negative MACD). Offsetting factors include resilient cash generation and management’s FY2026 plan to restore statutory profitability via restructuring and cost savings, but valuation support is limited given losses and the forecasted lack of dividends.
Positive Factors
Dominant Japan business
Dentsu's Japan operations are a durable earnings anchor: high-margin (24.4%) and record revenue, representing a large share of group sales. This stable, cash-generative core supports overall profitability and funds restructuring and investments while international recovery unfolds over several quarters.
Negative Factors
Large goodwill impairments & statutory losses
Huge impairments have materially eroded equity and signaled structural overpayment in prior acquisitions. The statutory losses reduce distributable reserves, constrain dividends, raise stakeholder scrutiny and increase the bar for future profitability, limiting strategic optionality and investor confidence over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Dominant Japan business
Dentsu's Japan operations are a durable earnings anchor: high-margin (24.4%) and record revenue, representing a large share of group sales. This stable, cash-generative core supports overall profitability and funds restructuring and investments while international recovery unfolds over several quarters.
Read all positive factors
Dentsu (4324) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥711.91B
Dividend Yield4.19%
Average Volume (3M)1.26M
Price to Earnings (P/E)―
Beta (1Y)0.63
Revenue Growth0.24%
EPS Growth-731.34%
CountryJP
Employees67,667
SectorCommunication Services
Sector Strength97
IndustryAdvertising Agencies
Share Statistics
EPS (TTM)-1025.00
Shares Outstanding265,800,000
10 Day Avg. Volume915,960
30 Day Avg. Volume1,261,200
Financial Highlights & Ratios
PEG Ratio-0.04
Price to Book (P/B)2.30
Price to Sales (P/S)0.60
P/FCF Ratio9.48
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥3,028.00Price Target Upside-11.59% Downside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)274.85
Revenue Forecast (FY)¥1.46T
Dentsu Business Overview & Revenue Model
Company Description
Dentsu Group Inc. operates in the advertising business in Japan. The company offers advertising services, including newspapers, magazines, radio, television, internet, sales promotions, movies, out-of-home, public transportation, and other service...
How the Company Makes Money
Dentsu primarily makes money by providing marketing and communications services to corporate and institutional clients under service contracts and project engagements. Key revenue streams include: (1) Media services: fees and/or commissions earned...
Dentsu Earnings Call Summary
Earnings Call Date:Feb 16, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 18, 2026
Earnings Call Sentiment Neutral
The call mixed clear operational strengths—especially a very strong Japan performance, cost-savings progress, return of international operating cash flow, targeted investments in data/AI, and client/award momentum—with material negative developments: very large goodwill impairments, statutory net loss, and suspension of dividends. Management emphasized decisive corrective action (conservative impairment assumptions, significant restructuring and cost-saving targets, and investments in AI/data) and provided FY26 guidance to return to statutory profitability. Given the substantive financial write-downs and dividend suspension but offset by tangible underlying operational improvements and a concrete turnaround plan, the tone is cautious and transitional rather than fully positive or wholly negative.Positive Updates
Group Organic Growth Slightly Above Guidance
Full-year organic growth of 0.5%, modestly above the 'broadly flat' guidance announced in November; Q4 organic growth 0.9% indicating sequential positive momentum.
Negative Updates
Large Goodwill Impairments and Statutory Losses
Recorded an additional goodwill impairment of JPY 310.1 billion in Q4; total goodwill impairment for FY2025 JPY 396.1 billion. Statutory operating loss of JPY 289.2 billion and net loss of JPY 327.6 billion for the year.
Read all updates
Q4-2025 Updates
Positive
Negative
Group Organic Growth Slightly Above Guidance
Full-year organic growth of 0.5%, modestly above the 'broadly flat' guidance announced in November; Q4 organic growth 0.9% indicating sequential positive momentum.
Read all positive updates
Company Guidance
Dentsu’s FY2026 guidance targets group organic growth of 0–1% (Japan +2–3%, Americas ~-2%, EMEA ~+1%, APAC ~+1%) with an operating margin in the low‑13% range and statutory forecasts of operating profit JPY 152.6 billion and net profit JPY 69.7 billion; management also reiterated no dividend for FY2025 and none forecast for FY2026. For context FY2025 delivered 0.5% organic growth (Q4 0.9%), consolidated net revenue ~JPY 1.2 trillion (+0.3% YoY), underlying operating profit JPY 172.5 billion (-2.1% YoY) and a 14.4% operating margin (-40 bps); regional FY25 results included Japan +6.2% (42% of revenue) and 24.4% margin, Americas -3% (26% of revenue) and 22.9% margin, EMEA -1.8% and 12.4% margin, APAC -6.8% and 2.5% margin. Balance‑sheet and restructuring metrics include FY25 goodwill impairments of JPY 396.1 billion (Q4 additional JPY 310.1 billion) reducing goodwill to JPY 320.1 billion (from ~JPY 700 billion), a negative non‑consolidated distributable amount of JPY 234.3 billion, a filed shelf registration for bond‑type class shares, one‑off FY25 spend JPY 20 billion delivering JPY 14 billion savings, planned additional JPY 28 billion savings in FY26 (total JPY 42 billion) and JPY 26 billion one‑off costs in FY26, a JPY 50 billion annual cost‑savings target by 2027, D&T investments JPY 8 billion in FY25 and up to JPY 14 billion in FY26, and headcount reductions of 3,400 planned (2,100 completed) with ~750 internal initiatives (>80% complete or in progress).Dentsu Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
55
Neutral
Cash Flow
49
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.44T | 1.41T | 1.30T | 1.25T | 1.09T |
| Gross Profit | 1.20T | 1.13T | 1.07T | 1.05T | 901.13B |
| EBITDA | 223.15B | 217.56B | 207.45B | 243.90B | 218.91B |
| Net Income | -327.60B | -192.17B | -10.71B | 59.85B | 108.39B |
Balance Sheet | |||||
| Total Assets | 3.21T | 3.51T | 3.63T | 3.74T | 3.72T |
| Cash, Cash Equivalents and Short-Term Investments | 295.18B | 371.99B | 390.68B | 603.74B | 723.54B |
| Total Debt | 468.24B | 754.77B | 713.46B | 756.59B | 771.27B |
| Total Liabilities | 2.76T | 2.74T | 2.72T | 2.79T | 2.81T |
| Stockholders Equity | 374.85B | 696.84B | 841.65B | 880.27B | 845.03B |
Cash Flow | |||||
| Free Cash Flow | 91.06B | 34.30B | 46.38B | 62.37B | 118.68B |
| Operating Cash Flow | 117.97B | 59.98B | 75.27B | 80.90B | 139.72B |
| Investing Cash Flow | -3.48B | -43.33B | -159.44B | -36.37B | 155.23B |
| Financing Cash Flow | -179.84B | -53.30B | -140.54B | -176.17B | -125.19B |
Dentsu Technical Analysis
Negative
3425.00
Price Trends
2897.74
Negative
3130.49
Negative
3099.98
Negative
Market Momentum
-47.63
Negative
42.27
Neutral
29.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4324, the sentiment is Negative. The current price of 3425 is above the 20-day moving average (MA) of 2801.63, above the 50-day MA of 2897.74, and above the 200-day MA of 3099.98, indicating a bearish trend. The MACD of -47.63 indicates Negative momentum. The RSI at 42.27 is Neutral, neither overbought nor oversold. The STOCH value of 29.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4324.
Dentsu Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | ¥68.53B | 18.19 | ― | 2.51% | 1.32% | -22.64% | |
64 Neutral | ¥86.59B | 27.09 | ― | 7.03% | -10.10% | -37.28% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
58 Neutral | ¥695.10B | 13.60 | 18.07% | 1.27% | 9.04% | 94.01% | |
58 Neutral | ¥381.24B | 10.59 | 3.96% | 2.75% | -8.56% | -47.89% | |
50 Neutral | ¥13.21B | 2.40 | ― | ― | -2.68% | 91.68% | |
46 Neutral | ¥711.91B | -2.63 | -59.21% | 4.19% | 0.24% | -731.34% |
* Communication Services Sector Average
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Dentsu Corporate Events
Dentsu Posts Deeper Net Loss in 2025 Despite Stable Core Operations
Feb 13, 2026
Dentsu Group reported a 1.7% rise in revenue to ¥1.44 trillion for the fiscal year ended December 31, 2025, with net revenue essentially flat and underlying operating profit slipping 2.1%, resulting in an operating margin of 14.4%. Despite st...
Dentsu Flags ¥310 Billion Goodwill Charge Proposal, Denies Final Decisions on CEO Change and Dividend
Feb 13, 2026
Dentsu said media reports that it had decided to book several hundred billion yen in goodwill impairment losses, cancel its FY2025 dividend, and replace its president and global CEO were premature, stressing that none of these matters had yet been...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.