Natoco Co (4627) AI Stock Analysis

• Market Cap: ¥13.73B
• Dividend Yield: 3.58%
• Average Volume (3M): 2.61K
• Price to Earnings (P/E): 12.5
• Beta (1Y): 0.40
• Revenue Growth: 7.33%
• EPS Growth: 18.98%
• Country: JP
• Employees: 415
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Chemicals - Specialty
• EPS (TTM): 31.51
• Shares Outstanding: 8,144,400
• 10 Day Avg. Volume: 2,490
• 30 Day Avg. Volume: 2,610
• PEG Ratio: 0.55
• Price to Book (P/B): 0.49
• Price to Sales (P/S): 0.53
• P/FCF Ratio: 9.40
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: ¥1,984.00 ▲(28.17% Upside)
• Action: Downgraded Date: 12/30/25
• Date: Action: Downgraded 12/30/25

The score is primarily supported by strong financial stability (notably zero debt) and attractive valuation (low P/E and solid dividend yield). This is tempered by inconsistent free cash flow and mixed/neutral technical signals, including a negative MACD.

Positive Factors

Balance Sheet Strength

Zero reported debt and a growing equity base create durable financial flexibility. This conservatism lowers solvency and refinancing risk, enabling the company to fund capex, weather industry cycles, and support dividends or strategic investments without near-term liquidity strain.

Operating Cash Flow Consistency

Consistently positive operating cash flow supports earnings quality and ongoing operations, providing a base to fund working capital, maintenance capex, and shareholder returns. Over the medium term this reduces reliance on external funding and underpins operational continuity.

Recent Revenue Growth

Strong recent revenue growth indicates improving demand or market share gains in the coating/chemical niche. Sustained top-line expansion provides scope to leverage fixed costs, restore margin expansion, and justify incremental investment in R&D or sales to capture longer-term structural growth.

Negative Factors

Free Cash Flow Volatility

Volatile and historically negative free cash flow undermines the company's ability to reliably fund discretionary spending, dividends, or M&A. Persisting swings suggest working-capital sensitivity or cyclical cash demands that can constrain strategic flexibility despite a strong balance sheet.

Margin Compression

A sustained decline from earlier margin peaks signals structural cost or pricing pressure in the business. If input costs, competitive pricing, or mix shifts persist, margin recovery will be difficult, limiting profit conversion from revenue and restraining long-term earnings resilience.

Moderate Return on Equity

Mid-single-digit ROE reflects modest efficiency in converting equity into profits. Over time this limits shareholder wealth creation versus higher-return peers, meaning management must drive stronger margins or faster growth to materially improve capital efficiency and investor returns.

Natoco Co Business Overview & Revenue Model

Company Description

Natoco Co., Ltd. manufactures and sells paints, inks, fine chemicals, synthetic resins, and related products in Japan. The company operates through three segments: Paints, Fine Chemicals, and Distillation Business. It offers manufactures and sells functional resins and coatings agents for resin materials; and recycled solvents. The company was formerly known as Natoco Paint Co., Ltd. and changed its name to Natoco Co., Ltd. in November 1998. Natoco Co., Ltd. was incorporated in 1948 and is headquartered in Miyoshi, Japan.

Natoco Co Financial Statement Overview

Summary

Strong balance sheet strength (zero debt and growing equity) supports a high-quality financial profile, and profitability is healthy with improved earnings versus the prior year. The main offset is cash flow reliability: free cash flow has been volatile and often negative historically, and recent operating cash flow appears low versus net income, indicating weaker cash conversion.

Income Statement

TTM (Trailing-Twelve-Months) results show healthy profitability (about 22% gross margin and ~5% net margin) with improved earnings versus the prior year. Revenue growth is strong in the latest period, but longer-term margin trajectory has softened from earlier peaks (notably lower operating and net margins than 2021–2022), which suggests some pricing/cost pressure and a more normalized earnings profile.

Balance Sheet

Balance sheet quality is a key strength: the company reports zero debt across periods and a steadily growing equity base, indicating conservative financial management and strong solvency. Returns on equity are positive but moderate in the most recent period (mid-single digits), implying that while the capital structure is very safe, overall efficiency in generating profits from equity is not exceptionally high.

Cash Flow

Operating cash flow is consistently positive, which supports earnings quality; however, free cash flow has been volatile and often negative in recent years before turning positive in the latest period. Cash conversion remains a watch item, with operating cash flow relatively low versus net income in the most recent year, suggesting working-capital swings and/or cash demands that can pressure near-term financial flexibility despite strong solvency.

Breakdown	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	22.28B	20.75B	20.16B	20.45B	19.05B
Gross Profit	5.26B	4.83B	4.74B	5.10B	5.28B
EBITDA	2.12B	2.03B	2.01B	2.40B	2.58B
Net Income	1.14B	955.98M	951.21M	1.51B	1.64B
Balance Sheet
Total Assets	31.03B	29.83B	28.84B	28.22B	26.28B
Cash, Cash Equivalents and Short-Term Investments	11.71B	11.75B	10.27B	9.39B	9.03B
Total Debt	0.00	0.00	0.00	0.00	0.00
Total Liabilities	6.44B	6.26B	6.09B	6.14B	5.69B
Stockholders Equity	24.42B	23.57B	22.75B	22.09B	20.60B
Cash Flow
Free Cash Flow	1.27B	1.18B	1.07B	1.17B	658.69M
Operating Cash Flow	1.85B	1.59B	1.69B	2.03B	1.90B
Investing Cash Flow	-211.87M	-789.66M	-2.32B	-2.12B	-1.31B
Financing Cash Flow	-398.30M	-413.32M	-383.36M	-414.59M	-384.58M

Natoco Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1548.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4627, the sentiment is Positive. The current price of 1548 is below the 20-day moving average (MA) of 1777.55, below the 50-day MA of 1668.92, and above the 200-day MA of 1543.32, indicating a bullish trend. The MACD of 43.84 indicates Positive momentum. The RSI at 72.96 is Negative, neither overbought nor oversold. The STOCH value of 87.32 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4627.

Natoco Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4625	80 Outperform	¥4.91B	12.52	―	2.27%	1.79%	31.63%
4623	72 Outperform	¥6.59B	7.93	―	3.50%	-8.27%	-3.23%
4629	70 Outperform	¥7.76B	8.04	―	2.51%	2.26%	51.04%
4627	68 Neutral	¥13.73B	12.55	―	3.58%	7.33%	18.98%
4624	66 Neutral	¥5.75B	6.39	―	1.39%	2.67%	37.55%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
4615	44 Neutral	¥4.25B	-15.17	―	―	8.66%	-239.07%