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Bridgestone Corporation (JP:5108)
:5108
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Bridgestone
(OTC:5108)
Rating:76Outperform
Price Target:
¥6,989.00
▲(17.72%Upside)
Positive Factors
Market Position
Bridgestone is second only to Michelin globally, and leads in key segments like mining and aircraft tyres.
Product Innovation
Early data on new ENLITEN technology, as well as recent fitments on models such as Maserati Grecale Folgore & Audi e-tron GT, are encouraging, and the technology could be gamechanging.
Negative Factors
Financial Guidance
Bridgestone was the only tyremaker to reduce FY guidance at H1 due to multiple headwinds including FX, weakness in Japan & Latam and pressure in North American Truck & Bus.
Bridgestone (5108) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥4.09T
Dividend Yield3.34%
Average Volume (3M)1.81M
Price to Earnings (P/E)14.6
Beta (1Y)0.80
Revenue Growth2.07%
EPS Growth-15.58%
CountryJP
Employees121,464
SectorConsumer Cyclical
Sector Strength68
IndustryAuto - Parts
Share Statistics
EPS (TTM)111.16
Shares Outstanding713,698,240
10 Day Avg. Volume2,468,780
30 Day Avg. Volume1,811,183
Financial Highlights & Ratios
PEG Ratio-4.21
Price to Book (P/B)1.20
Price to Sales (P/S)0.00
P/FCF Ratio14.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥6,671.49Price Target Upside12.37% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Bridgestone Business Overview & Revenue Model
Company DescriptionBridgestone is a leading global manufacturer of tires and rubber products, operating primarily in the automotive sector. The company produces a wide range of tires for passenger cars, trucks, buses, motorcycles, and aircraft, as well as industrial products and materials. Bridgestone is also involved in diversified operations, including the production of industrial rubber and chemical products, as well as sporting goods. The company's extensive research and development efforts ensure continuous innovation and quality improvement in its product offerings, positioning it as a trusted name in the tire industry.
How the Company Makes MoneyBridgestone makes money primarily through the sale of tires and related products. Its key revenue streams include the manufacturing and distribution of tires for various types of vehicles, including passenger cars, commercial trucks, and aircraft. The company also generates income from its diversified products, which include industrial rubber items and chemical products. Additionally, Bridgestone benefits from strategic partnerships with automotive manufacturers and retailers, which help expand its market reach. The company's global presence allows it to tap into different markets, contributing significantly to its earnings. Bridgestone's focus on innovation and quality in its products enhances customer satisfaction and drives repeat business, further supporting its revenue model.
Bridgestone Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q4-2024)
| % Change Since: -2.08%|
Next Earnings Date:Aug 08, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture, with notable achievements in revenue and profit growth, especially in premium tire and specialty solutions segments. However, significant challenges in Latin America, deteriorating profitability in Japan, and the impact of industry structural changes contributed to a complex business environment. Shareholder returns are being prioritized, but the company faces ongoing pressure to adapt to market changes and enhance its operational efficiency.Q4-2024 Updates
Positive Updates
Year-on-Year Increase in Revenue and Profit
The company achieved a year-on-year increase in both revenue and adjusted operating profit, partly due to favorable foreign exchange rates. Revenue was approximately JPY4.4 trillion, and adjusted operating profit was approximately JPY480 billion.
Premium Tire Business Performance
The premium tire business secured an adjusted operating profit margin level of 14%, with a focus on enhancing profitability through business optimization and cost management.
North American Business Recovery
In North America, revenue and profit increased compared to the prior year, with aftermarket tire sales growth contributing to business recovery.
Specialties Tire Solutions Growth
The Specialties Tire Solutions business, including mining and aircraft tires, saw increased profit versus the prior year, with strong sales in mining tire solutions and improved profitability in aircraft tires.
Shareholder Return Strategy
The company plans a share buyback of up to 75 million shares costing JPY300 billion and aims to increase shareholders' return by improving the dividend amount to JPY230 for 2025.
Negative Updates
Challenges in Latin America
The Latin America business faced significant challenges, with a decrease in revenue and profit versus the prior year, leading to a deficit. The company announced optimization of plant capacity and workforce in Argentina and Brazil to address these issues.
Weak Performance in Japan and Diversified Products
The profitability of the Japan tire business and diversified products business weakened, contributing to the company landing below the fiscal year guidance of August 2024.
Impact of Structural Changes and Low-End Imports
Structural changes in the automotive industry, particularly the rise of Chinese EVs and increased low-end imports, especially in Latin America and Europe, posed challenges to the business.
Declining ROIC and ROE
ROIC was 8.2%, and ROE was 8.1%, both below the previous year's levels, indicating a decline in earning power and capital efficiency.
Company Guidance
In the call, Bridgestone provided detailed guidance for 2025 following their 2024 financial results. They reported a revenue of JPY4.4 trillion for 2024 with an adjusted operating profit of JPY480 billion and a margin of 10.9%. The net income from continuing operations was JPY295 billion, with an ROIC of 8.2% and an ROE of 8.1%. The company outlined a "year of Emergency and Crisis Management" for 2025, focusing on growth with quality and implementing both defense and offense strategies. They plan to increase revenue to JPY4.370 trillion and adjust operating profit to JPY505 billion, targeting a margin of 11.7%. The ROIC is expected to recover to 9.2%. Bridgestone also announced a share buyback plan of up to JPY300 billion and an increased dividend payout, aiming for a 50% payout ratio. They emphasized optimizing business footprints, especially in North America and Europe, and improving profitability through cost reduction and premium focus.Bridgestone Financial Statement Overview
Summary
Bridgestone's financial health is robust, with consistent revenue growth and stable margins. The company has managed to reduce its debt levels significantly, enhancing financial stability. Although there is a dip in net income and free cash flow, the overall cash generation remains strong. The company is well-positioned in the auto parts industry, with a solid balance sheet and efficient cash flow management.Income Statement
Bridgestone has shown consistent revenue growth, with a 2.7% increase in 2024 compared to 2023. The gross profit margin remains strong, increasing from 35.7% in 2023 to 39% in 2024. However, there is a slight decline in net profit margin from 7.7% in 2023 to 6.4% in 2024. The EBIT and EBITDA margins are stable at 10.7% and 17.9%, respectively, indicating robust operational efficiency.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio improved to 0.19 in 2024 from 0.25 in 2023, reflecting a decrease in leverage. The return on equity (ROE) decreased from 9.87% to 7.64%, potentially due to lower net income. The equity ratio improved to 65.2%, indicating strong financial stability. Overall, the balance sheet reflects a healthy financial position with moderate leverage and strong equity.80
Positive
Cash Flow
Free cash flow decreased by 21.6% from 318.5 billion in 2023 to 249.6 billion in 2024, reflecting higher capital expenditures. The operating cash flow to net income ratio remains strong at 1.93, indicating efficient cash generation. Although free cash flow to net income ratio decreased, it remains positive, showcasing the company's ability to generate cash from operations.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 4.42T | 4.43T | 4.31T | 4.11T | 3.25T | 2.70T | Gross Profit |
| 1.71T | 1.73T | 1.54T | 1.50T | 1.23T | 927.06B | EBIT |
| 469.77B | 473.87B | 472.87B | 440.70B | 387.82B | 166.31B | EBITDA |
| 771.91B | 791.38B | 793.24B | 736.66B | 628.59B | 294.76B | Net Income Common Stockholders |
| 274.28B | 284.99B | 331.31B | 300.31B | 161.56B | -23.30B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 591.66B | 718.16B | 724.60B | 534.01B | 799.31B | 817.82B | Total Assets |
| 5.40T | 5.72T | 5.43T | 4.96T | 4.57T | 4.19T | Total Debt |
| 688.76B | 727.72B | 830.16B | 767.17B | 811.14B | 1.01T | Net Debt |
| 97.09B | 20.99B | 105.56B | 248.26B | 23.60B | 195.65B | Total Liabilities |
| 1.79T | 1.94T | 2.02T | 1.95T | 1.90T | 1.99T | Stockholders Equity |
| 3.55T | 3.73T | 3.35T | 2.97T | 2.63T | 2.15T |
| Cash Flow | Free Cash Flow | ||||
| 295.76B | 249.55B | 318.50B | 13.76B | 96.55B | 308.83B | Operating Cash Flow |
| 590.13B | 548.84B | 661.43B | 268.48B | 281.54B | 526.95B | Investing Cash Flow |
| -236.00B | -255.06B | -297.72B | -338.00B | 131.70B | -155.38B | Financing Cash Flow |
| -397.44B | -343.26B | -183.66B | -364.11B | -379.32B | 18.08B |
Bridgestone Technical Analysis
Neutral
5937.00
Price Trends
5941.12
Negative
5826.03
Positive
5607.42
Positive
Market Momentum
-3.19
Positive
44.67
Neutral
11.80
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5108, the sentiment is Neutral. The current price of 5937 is below the 20-day moving average (MA) of 6084.75, below the 50-day MA of 5941.12, and above the 200-day MA of 5607.42, indicating a neutral trend. The MACD of -3.19 indicates Positive momentum. The RSI at 44.67 is Neutral, neither overbought nor oversold. The STOCH value of 11.80 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:5108.
Bridgestone Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $549.55B | 8.78 | 7.48% | 2.61% | 8.13% | -17.49% | |
81 Outperform | $461.82B | 7.08 | 14.57% | 4.76% | 4.01% | -22.73% | |
77 Outperform | $897.58B | 9.59 | 13.91% | 3.74% | 6.27% | 13.96% | |
76 Outperform | ¥4.09T | 14.62 | 7.60% | 3.34% | 2.07% | -15.58% | |
69 Neutral | ¥97.79B | 24.10 | 4.23% | 2.32% | -21.60% | ||
62 Neutral | $6.83B | 11.28 | 2.95% | 3.88% | 2.70% | -24.56% | |
52 Neutral | $435.26B | 50.94 | -1.90% | 3.26% | 1.37% | -119.72% |
* Consumer Cyclical Sector Average
Performance Comparison
JP:5108
Bridgestone
5,937.00
-536.08
-8.28%
JP:5161
Nishikawa Rubber Co., Ltd.
2,472.00
1,546.99
167.24%
JP:5101
Yokohama Rubber Co
3,509.00
-154.50
-4.22%
JP:5110
Sumitomo Rubber Industries
1,641.50
-16.66
-1.00%
JP:5105
Toyo Tire
3,007.00
350.76
13.21%
JP:5334
NGK SPARK PLUG CO
4,497.00
-212.51
-4.51%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.