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Bridgestone Corporation (JP:5108)
:5108
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Bridgestone
(OTC:5108)
Rating:77Outperform
Price Target:
¥6,660.00
▲(11.15%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
¥4.20T
Dividend Yield3.66%
Average Volume (3M)2.15M
Price to Earnings (P/E)15.0
Beta (1Y)0.78
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. Volume1,785,990
30 Day Avg. Volume2,152,146
Financial Highlights & Ratios
PEG Ratio-4.05
Price to Book (P/B)1.15
Price to Sales (P/S)0.00
P/FCF Ratio13.74
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥6,424.80Price Target Upside7.22% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Bridgestone Business Overview & Revenue Model
Company DescriptionBridgestone Corporation, headquartered in Tokyo, Japan, is a leading global manufacturer of tires and rubber products. The company operates across multiple sectors, including automotive, industrial, and construction, producing a wide range of products such as tires for passenger cars, trucks, buses, aircraft, motorcycles, and agricultural machinery. Bridgestone also offers diversified products like industrial rubber and chemical products, sporting goods, and bicycles, making it a versatile player in the rubber industry.
How the Company Makes MoneyBridgestone primarily generates revenue through the sale of its wide range of tire products, which constitute the majority of its earnings. The company serves various markets, including original equipment manufacturers (OEM) and the replacement tire market, catering to both individual consumers and businesses. Additionally, Bridgestone earns income from its diversified product offerings, such as industrial rubber and chemical products, which are used in construction and manufacturing. The company also benefits from strategic partnerships and collaborations with automotive manufacturers and other industries, enhancing its market reach and distribution networks. Furthermore, Bridgestone invests in research and development to innovate and improve product performance, sustainability, and safety, ensuring a competitive edge in the global market.
Bridgestone Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q4-2024)
| % Change Since: 0.79%|
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 statements depict a well-managed company with solid revenue growth and robust profitability metrics. The balance sheet is strong, with a healthy equity position and reasonable leverage. Cash flows are effectively managed, supporting the company's operations and growth plans. While there are areas for improvement, particularly in net profit margin and monitoring of debt levels, the overall financial health is commendable.Income Statement
Bridgestone shows strong financial performance with a consistent increase in total revenue over the years, reflected in a positive revenue growth rate. The company maintains a healthy gross profit margin, indicating efficient cost management. EBIT and EBITDA margins are stable, showcasing solid operating performance. However, the net profit margin has slightly declined in the most recent TTM period, suggesting room for improvement in net income management.85
Very Positive
Balance Sheet
The balance sheet shows a strong equity position with a favorable equity ratio, indicating financial stability. The debt-to-equity ratio is reasonable, demonstrating effective leverage management. The return on equity is robust, reflecting efficient use of shareholder funds. However, a slight increase in total liabilities in the TTM period signals a need to monitor debt levels closely.82
Very Positive
Cash Flow
Cash flow analysis highlights a positive trend in free cash flow growth, reflecting effective cash management. The operating cash flow to net income ratio is strong, indicating good cash generation relative to reported earnings. The free cash flow to net income ratio is also healthy, although it has shown fluctuations in recent periods. Overall, cash flows are well-managed, supporting operational and strategic initiatives.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.43T | 4.31T | 4.11T | 3.25T | 2.70T |
| Gross Profit | 1.73T | 1.54T | 1.50T | 1.23T | 927.06B |
| EBITDA | 791.38B | 793.24B | 736.66B | 628.59B | 294.76B |
| Net Income | 284.99B | 331.31B | 300.31B | 161.56B | -23.30B |
Balance Sheet | |||||
| Total Assets | 5.72T | 5.43T | 4.96T | 4.57T | 4.19T |
| Cash, Cash Equivalents and Short-Term Investments | 718.16B | 724.60B | 518.90B | 799.31B | 817.82B |
| Total Debt | 727.72B | 830.16B | 767.17B | 811.14B | 1.01T |
| Total Liabilities | 1.94T | 2.02T | 1.95T | 1.90T | 1.99T |
| Stockholders Equity | 3.73T | 3.35T | 2.97T | 2.63T | 2.15T |
Cash Flow | |||||
| Free Cash Flow | 249.55B | 318.50B | 13.76B | 96.55B | 308.83B |
| Operating Cash Flow | 548.84B | 661.43B | 268.48B | 281.54B | 526.95B |
| Investing Cash Flow | -255.06B | -297.72B | -338.00B | 131.70B | -155.38B |
| Financing Cash Flow | -343.26B | -183.66B | -364.11B | -379.32B | 18.08B |
Bridgestone Technical Analysis
Positive
5992.00
Price Trends
5945.34
Positive
5869.70
Positive
5581.38
Positive
Market Momentum
33.30
Negative
52.61
Neutral
45.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5108, the sentiment is Positive. The current price of 5992 is above the 20-day moving average (MA) of 5957.54, above the 50-day MA of 5945.34, and above the 200-day MA of 5581.38, indicating a bullish trend. The MACD of 33.30 indicates Negative momentum. The RSI at 52.61 is Neutral, neither overbought nor oversold. The STOCH value of 45.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5108.
Bridgestone Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $477.21B | 7.31 | 14.57% | 4.19% | 4.01% | -22.73% | |
80 Outperform | $984.46B | 10.64 | 13.91% | 3.57% | 6.27% | 13.95% | |
78 Outperform | ¥106.11B | 26.15 | 4.26% | 2.32% | -21.60% | ||
77 Outperform | ¥4.20T | 15.02 | 7.60% | 3.66% | 2.07% | -15.58% | |
75 Outperform | ¥677.25B | 10.82 | 7.48% | 2.33% | 8.13% | -17.49% | |
63 Neutral | $17.14B | 11.11 | -7.24% | 3.14% | 1.68% | -25.43% | |
58 Neutral | ¥441.44B | 50.94 | -1.90% | 3.79% | 1.37% | -119.72% |
* Consumer Cyclical Sector Average
Performance Comparison
JP:5108
Bridgestone
6,017.00
216.50
3.73%
JP:5161
Nishikawa Rubber Co., Ltd.
2,701.00
1,779.84
193.22%
JP:5101
Yokohama Rubber Co
4,301.00
1,064.31
32.88%
JP:5110
Sumitomo Rubber Industries
1,781.00
320.54
21.95%
JP:5105
Toyo Tire
3,190.00
907.70
39.77%
JP:5334
NGK SPARK PLUG CO
5,120.00
932.28
22.26%
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.