Moresco Corporation (5018) AI Stock Analysis

• Market Cap: ¥16.47B
• Dividend Yield: 3.03%
• Average Volume (3M): 8.04K
• Price to Earnings (P/E): 4.8
• Beta (1Y): 0.66
• Revenue Growth: 1.59%
• EPS Growth: -26.64%
• Country: JP
• Employees: 821
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 72.90
• Shares Outstanding: 9,696,500
• 10 Day Avg. Volume: 6,310
• 30 Day Avg. Volume: 8,036
• PEG Ratio: -0.53
• Price to Book (P/B): 0.50
• Price to Sales (P/S): 0.32
• P/FCF Ratio: 6.13
• 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: 66 Neutral
• Price Target: ¥1,896.00 ▲(42.56% Upside)
• Action: Downgraded Date: 03/24/26
• Date: Action: Downgraded 03/24/26

The score is driven primarily by mid-range financial quality (stronger balance sheet, but volatile margins and inconsistent cash conversion) and an attractive valuation (low P/E and solid yield). These positives are tempered by weak near-term technical momentum, with the price below key short-term averages and a slightly negative MACD.

Positive Factors

Balance Sheet Health

A high equity ratio and very low leverage provide durable financial stability. This balance sheet strength supports capital spending, withstands cyclical downturns in manufacturing demand, and preserves optionality for strategic investments or dividends over the next 2–6 months.

Cash Generation

Consistent operating cash flow and rising free cash flow signal dependable internal funding. Strong cash generation supports working capital, modest capex and shareholder returns while reducing reliance on external finance, reinforcing long-term operational resilience.

Revenue Growth & Gross Margin

Sustained top-line growth with nearly 29% gross margin reflects value-added specialty formulations and healthy pricing power. Recurring industrial consumption and technical service ties support durable demand and margin sustainability across manufacturing cycles.

Negative Factors

Net Margin Compression

A material decline in net margin indicates weaker conversion of sales into bottom-line profit. If structural (cost inflation, higher SG&A, or pricing pressure), this reduces retained earnings and limits reinvestment capacity and long-term return generation for shareholders.

Declining Return on Equity

Lower ROE signals reduced capital efficiency despite strong equity backing. Persistently muted returns can constrain shareholder value creation and may indicate that the firm isn't translating balance sheet strength into proportionate profitable growth.

Cash Profitability Needs Improvement

While FCF is positive, a modest FCF-to-net-income ratio suggests suboptimal cash conversion relative to reported profits. Persistent gap could reflect working capital drag or capex needs, limiting flexibility for higher dividends or cushioning during demand downturns.

Moresco Corporation Business Overview & Revenue Model

Company Description

MORESCO Corporation, together with its subsidiaries, develops, manufactures, and sells chemicals in Japan and internationally. The company offers functional fluids, such as high vacuum pump oils, fire resistant hydraulic fluids, die-casting lubricants, cutting fluids, brake fluids, antifreeze products, heat-conducting media, and lubricants for hot forging; synthetic lubricants, including high temperature lubricating oils, hard disk surface lubricants, and radiation-resistant lubricants; and liquid paraffin and sulfonates. It also provides hot melt adhesives, organic device sealants, gas/water vapor transmission rate analyzers, organic photovoltaics, plunger lubricants, grease products, and wastewater-treatment equipment, as well as chemical analysis testing services. In addition, the company is involved in the building rental business. Its products are used in automobiles, iron and steel, construction materials, electronic equipment and home electric appliances, sanitary and daily goods, plastic, fiber, food, packaging materials, nuclear power related, cosmetics/pharmaceuticals, aircraft, factory and equipment related, industrial machinery, wastewater treatment, and other applications. The company was formerly known as Matsumura Oil Reserch Corp. and changed its name to MORESCO Corporation in 2009. MORESCO Corporation was founded in 1958 and is headquartered in Kobe, Japan.

How the Company Makes Money

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Moresco Corporation Financial Statement Overview

Summary

Supported by a conservatively levered balance sheet and steadily growing equity, but held back by volatile profitability (margin compression after 2022 highs) and uneven cash conversion with sharp swings in free cash flow across 2023–2025.

Income Statement

Revenue has expanded over the last several years, including a modest step-up in the latest year, showing a generally positive top-line trajectory. However, profitability is volatile: margins peaked in 2022 but compressed meaningfully in 2023, and while 2025 shows recovery in operating profit versus 2023, net profit margin remains thin and below prior highs. Overall, improving revenue trends are a plus, but inconsistent earnings power and lower recent margins keep the score in the middle range.

Balance Sheet

The balance sheet looks conservatively levered, with debt-to-equity staying relatively low across the period and improving in the latest year versus 2024. Equity has grown steadily, supporting financial flexibility. Returns on equity are positive but not consistently strong, indicating the company is well-capitalized but not always converting that capital into high profitability.

Cash Flow

Cash generation is uneven. Operating cash flow is solid in the last two years, and free cash flow rebounded strongly in 2025 after a very weak 2024 and a negative 2023. That said, cash conversion vs. earnings is not consistently strong (notably poor in 2024 and negative in 2023), which raises questions around working-capital swings and the durability of free cash flow.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	34.14B	34.37B	31.89B	30.33B	27.30B	24.48B
Gross Profit	10.18B	9.49B	8.48B	7.54B	8.09B	7.14B
EBITDA	2.95B	2.75B	2.43B	1.89B	2.77B	2.30B
Net Income	943.00M	1.01B	1.28B	614.00M	1.81B	517.00M
Balance Sheet
Total Assets	36.57B	38.30B	37.05B	32.02B	29.01B	27.71B
Cash, Cash Equivalents and Short-Term Investments	5.07B	5.51B	5.64B	4.26B	4.00B	4.11B
Total Debt	4.48B	5.26B	6.18B	2.99B	968.00M	3.36B
Total Liabilities	12.24B	13.29B	13.93B	10.78B	8.46B	9.54B
Stockholders Equity	21.14B	21.68B	20.13B	18.53B	17.96B	15.90B
Cash Flow
Free Cash Flow	0.00	1.78B	482.00M	-768.00M	1.40B	1.62B
Operating Cash Flow	0.00	2.75B	2.93B	515.00M	2.33B	2.09B
Investing Cash Flow	0.00	-1.21B	-4.25B	-1.17B	603.00M	-660.00M
Financing Cash Flow	0.00	-1.68B	2.82B	1.23B	-2.94B	-1.02B

Moresco Corporation Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1330.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5018, the sentiment is Neutral. The current price of 1330 is below the 20-day moving average (MA) of 2009.56, below the 50-day MA of 1947.19, and below the 200-day MA of 1470.99, indicating a neutral trend. The MACD of -25.49 indicates Positive momentum. The RSI at 36.37 is Neutral, neither overbought nor oversold. The STOCH value of 2.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:5018.

Moresco Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4231	72 Outperform	¥20.27B	7.90	―	5.21%	0.91%	100.31%
4635	71 Outperform	¥19.17B	4.28	―	3.61%	8.85%	110.05%
4113	69 Neutral	¥13.23B	16.46	―	3.23%	13.09%	89.45%
5018	66 Neutral	¥16.47B	4.76	―	3.03%	1.59%	-26.64%
4410	66 Neutral	¥22.90B	5.80	―	4.62%	7.19%	―
4409	62 Neutral	¥16.42B	9.21	―	2.78%	1.30%	-5.03%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%