Kao (4452) AI Stock Analysis

• Market Cap: $3.04T
• Dividend Yield: 2.33%
• Average Volume (3M): 1.47M
• Price to Earnings (P/E): 26.6
• Beta (1Y): 0.13
• Revenue Growth: 4.26%
• EPS Growth: 61.42%
• Country: JP
• Employees: 32,566
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Household & Personal Products
• EPS (TTM): 75.79
• Shares Outstanding: 465,900,000
• 10 Day Avg. Volume: 1,645,420
• 30 Day Avg. Volume: 1,466,456
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 1.79
• Enterprise Value/Gross Profit: 4.55
• Enterprise Value/Ebitda: 11.85
• 1Y Price Target: $7,536.59
• Price Target Upside: 14.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: ¥7,016.00 ▲(6.92% Upside)

Kao's overall stock score reflects its stable financial performance and efficient operations, despite challenges in revenue growth and cash flow. Technical indicators suggest neutral to bearish momentum, and the stock appears overvalued based on its P/E ratio, though the dividend yield offers some appeal. The absence of earnings call and corporate events data limits further insights.

Positive Factors

Strong Profitability

High profit margins indicate efficient operations and strong pricing power, contributing to sustainable profitability over time.

Low Leverage

Prudent leverage management provides financial stability and flexibility, allowing the company to navigate economic fluctuations effectively.

Robust Capital Structure

A strong capital structure with high equity backing enhances financial resilience and supports long-term strategic initiatives.

Negative Factors

Revenue Growth Decline

A decline in revenue growth suggests challenges in market expansion and product adoption, potentially impacting future earnings.

Negative Free Cash Flow Growth

Negative free cash flow growth can limit the company's ability to invest in growth opportunities and return capital to shareholders.

Revenue Challenges

Ongoing revenue challenges may necessitate strategic initiatives to reignite growth and maintain competitive positioning in the market.

Kao Business Overview & Revenue Model

Company Description

Kao Corporation develops and sells cosmetic, skin/hair care, human health care, fabric and home care, and chemical products. It operates through five segments: Hygiene and Living Care Business, Health and Beauty Care Business, Life Care Business, Cosmetics Business, and Chemical Business. The Hygiene and Living Care Business segment offers laundry detergents; fabric treatments; kitchen, paper, and house cleaning products; sanitary napkins; and baby diapers. The Health and Beauty Care Business segments provides skin and hair care products, professional hair care products, bath additives, and oral care and thermo products. The Life Care Business segments offers health drinks, as well as hygiene products for commercial use. The Cosmetics Business segment provides counseling and self-selection cosmetic products. The Chemical Business segment offers oleo chemicals; fat and oil derivatives; surfactants; fragrances; water-reducing admixtures; casting sand binders; plastics additives; process chemicals; toners and toner binders; inkjet ink colorants and ink; fine polishing agents and cleaners; and materials and process chemicals. The company was formerly known as Kao Soap Co., Ltd. and changed its name to Kao Corporation in 1982. Kao Corporation was founded in 1887 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Kao generates revenue through multiple key streams, primarily from the sale of its consumer products across various categories. The Beauty Care segment, which includes cosmetics, skincare, and haircare products, contributes significantly to its earnings, driven by strong brand loyalty and continuous innovation. The Health & Wellness segment, which encompasses dietary supplements and personal health products, also plays a vital role in revenue generation. Additionally, the Home Care segment, offering cleaning and laundry products, benefits from a broad consumer base seeking effective household solutions. Kao also engages in strategic partnerships with retailers and distributors, enhancing its market reach and presence. Factors contributing to its earnings include a focus on sustainability and eco-friendly products, which resonate with consumers, and a robust supply chain that enables efficient distribution. Overall, Kao's diversified product portfolio and commitment to innovation and sustainability are central to its revenue model.

Kao Financial Statement Overview

Summary

Kao's financial performance is stable with strong profitability and efficient operations. However, the decline in revenue growth and negative free cash flow growth are concerns. The company's low leverage and solid equity position provide a buffer against these challenges.

Income Statement

Kao's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue growth rate by 18.3%, which is a concern. However, the company maintains a healthy gross profit margin of 38% and a net profit margin of 6.9%. The EBIT and EBITDA margins are also solid at 9.8% and 15.1%, respectively, indicating efficient operations despite revenue challenges.

Balance Sheet

The balance sheet reflects a strong financial position with a low debt-to-equity ratio of 0.24, suggesting prudent leverage management. The return on equity (ROE) is 11%, indicating good profitability relative to shareholder equity. The equity ratio stands at 58.4%, showing a robust capital structure with significant equity backing.

Cash Flow

Cash flow analysis reveals some areas of concern. The free cash flow growth rate is negative at -2.96%, indicating a decline in cash generation. However, the operating cash flow to net income ratio is 0.42, and the free cash flow to net income ratio is 0.68, suggesting that the company still generates adequate cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.65T	1.63T	1.53T	1.55T	1.42T	1.38T
Gross Profit	647.26B	638.40B	560.43B	548.34B	573.19B	590.69B
EBITDA	248.51B	239.63B	154.50B	205.46B	239.94B	265.89B
Net Income	113.98B	107.77B	43.87B	86.04B	109.64B	126.14B
Balance Sheet
Total Assets	1.80T	1.87T	1.77T	1.73T	1.70T	1.67T
Cash, Cash Equivalents and Short-Term Investments	321.58B	368.24B	291.66B	271.85B	342.16B	360.43B
Total Debt	240.62B	245.33B	261.07B	262.89B	268.68B	274.21B
Total Liabilities	723.67B	768.40B	757.70B	730.97B	720.13B	727.42B
Stockholders Equity	1.05T	1.07T	983.66B	972.06B	965.14B	923.69B
Cash Flow
Free Cash Flow	124.14B	144.18B	136.03B	53.70B	104.00B	144.87B
Operating Cash Flow	183.95B	201.59B	202.48B	130.91B	175.52B	214.72B
Investing Cash Flow	-52.61B	-45.90B	-109.30B	-74.91B	-67.23B	-61.94B
Financing Cash Flow	-100.22B	-104.58B	-79.98B	-139.31B	-141.57B	-87.06B

Kao Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6562.00
• 50DMA: Positive
• 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:4452, the sentiment is Positive. The current price of 6562 is above the 20-day moving average (MA) of 6406.00, above the 50-day MA of 6551.36, and above the 200-day MA of 6422.13, indicating a bullish trend. The MACD of 13.86 indicates Negative momentum. The RSI at 59.09 is Neutral, neither overbought nor oversold. The STOCH value of 68.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4452.

Kao Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8113	70 Outperform	$1.80T	20.61	11.28%	3.11%	-1.04%	-6.98%
4927	68 Neutral	$297.77B	46.33	3.99%	3.92%	-0.89%	-34.14%
4452	66 Neutral	$3.04T	26.61	10.99%	2.33%	4.26%	61.42%
4912	66 Neutral	$419.99B	20.49	7.29%	1.89%	1.29%	4.72%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
4922	60 Neutral	$345.44B	115.34	1.11%	2.41%	2.82%	-79.45%
4911	56 Neutral	¥1.05T	-808.82	―	1.99%	-3.60%	-112.93%

Kao Corporate Events

Kao Corporation Reports Modest Growth Amid Global Challenges

Kao Corporation is a leading Japanese company in the consumer goods sector, specializing in household and personal care products, cosmetics, and chemicals. The company is known for its innovative approach and commitment to sustainability.

Kao Corporation Reports Strong First Half 2025 Financial Results and Raises Full-Year Forecast

Kao Corporation reported a 2.7% increase in net sales and a significant 19.9% rise in operating income for the first half of 2025, indicating strong operational performance. The company has revised its forecast for the fiscal year ending December 31, 2025, projecting a 3.8% increase in net sales and a 12.5% rise in operating income, reflecting positive market positioning and growth expectations.

The most recent analyst rating on (JP:4452) stock is a Hold with a Yen7000.00 price target. To see the full list of analyst forecasts on Kao stock, see the JP:4452 Stock Forecast page.