Kobe Steel Ltd (JP:5406)
:5406
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Kobe Steel
(5406)
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Rating:69Neutral
Price Target:
¥2,203.00
▼(-0.74% Downside)
Action:Downgraded
Date:05/12/26
The score is driven primarily by improved financial strength (better profitability vs earlier years and a clear deleveraging trend) and an attractive valuation (low P/E with a ~4% dividend yield). Offsetting these positives are mixed technical signals and signs of late-cycle softness, including FY2026 revenue decline, margin compression from FY2024 highs, and uneven free cash flow conversion.
Positive Factors
Deleveraging / Balance sheet resilience
A materially lower debt-to-equity ratio versus earlier years increases financial flexibility and resilience in a cyclical steel industry. This durable improvement reduces refinancing risk, supports investment or M&A optionality, and strengthens the company's ability to withstand demand downturns without forcing asset sales or deep cuts to capex.
Negative Factors
Revenue softness
A decline in top-line sales in FY2026 signals demand weakness or competitive pressure in core markets. In a capital-intensive materials business, prolonged revenue weakness can reduce capacity utilization, erode scale economics, and make it harder to sustain investment and employment levels, increasing cyclicality risk over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Deleveraging / Balance sheet resilience
A materially lower debt-to-equity ratio versus earlier years increases financial flexibility and resilience in a cyclical steel industry. This durable improvement reduces refinancing risk, supports investment or M&A optionality, and strengthens the company's ability to withstand demand downturns without forcing asset sales or deep cuts to capex.
Read all positive factors
Kobe Steel (5406) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥765.20B
Dividend Yield4.68%
Average Volume (3M)1.84M
Price to Earnings (P/E)7.9
Beta (1Y)0.95
Revenue Growth-4.64%
EPS Growth-21.94%
CountryJP
Employees38,050
SectorBasic Materials
Sector Strength58
IndustrySteel
Share Statistics
EPS (TTM)377.10
Shares Outstanding396,345,980
10 Day Avg. Volume1,901,770
30 Day Avg. Volume1,835,069
Financial Highlights & Ratios
PEG Ratio-0.36
Price to Book (P/B)0.59
Price to Sales (P/S)0.31
P/FCF Ratio9.64
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥1,960.00Price Target Upside-11.69% Downside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)228.94
Revenue Forecast (FY)¥2.50T
Kobe Steel Business Overview & Revenue Model
Company Description
Kobe Steel, Ltd. engages in the materials, machinery, and electric power businesses in Japan, North and South Americas, Europe, the Middle East, rest of Asia, and Oceania. The company offers steel sheet products, including high-tensile strength, h...
How the Company Makes Money
Kobe Steel makes money primarily by manufacturing and selling products and by providing engineering and related services. Key revenue streams include: (1) Materials sales: revenue from producing and selling steel products (including specialty and ...
Kobe Steel Financial Statement Overview
Summary
Income Statement
70
Positive
Balance Sheet
76
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Mar 2026 | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.53T | 2.44T | 2.56T | 2.54T | 2.47T | 2.08T |
| Gross Profit | 424.80B | 403.22B | 434.19B | 446.60B | 331.44B | 316.08B |
| EBITDA | 282.05B | 253.83B | 281.74B | 306.24B | 199.45B | 193.29B |
| Net Income | 148.81B | 93.72B | 120.18B | 109.55B | 72.57B | 60.08B |
Balance Sheet | ||||||
| Total Assets | 2.82T | 2.87T | 2.89T | 2.92T | 2.87T | 2.73T |
| Cash, Cash Equivalents and Short-Term Investments | 175.61B | 189.23B | 220.12B | 278.84B | 203.52B | 260.70B |
| Total Debt | 867.52B | 769.92B | 889.81B | 874.73B | 908.14B | 961.14B |
| Total Liabilities | 1.60T | 1.53T | 1.65T | 1.79T | 1.90T | 1.86T |
| Stockholders Equity | 1.15T | 1.26T | 1.16T | 1.06T | 913.96B | 815.33B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 77.25B | 34.99B | 110.42B | 20.73B | 12.36B |
| Operating Cash Flow | 0.00 | 201.68B | 148.26B | 205.28B | 119.69B | 168.81B |
| Investing Cash Flow | 0.00 | -73.66B | -113.87B | -53.72B | -97.27B | -147.81B |
| Financing Cash Flow | 0.00 | -162.41B | -96.23B | -81.21B | -85.56B | -82.84B |
Kobe Steel Technical Analysis
Positive
2219.50
Price Trends
1940.15
Positive
2049.58
Negative
1907.79
Positive
Market Momentum
-5.34
Negative
50.98
Neutral
34.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5406, the sentiment is Positive. The current price of 2219.5 is above the 20-day moving average (MA) of 1923.78, above the 50-day MA of 1940.15, and above the 200-day MA of 1907.79, indicating a bullish trend. The MACD of -5.34 indicates Negative momentum. The RSI at 50.98 is Neutral, neither overbought nor oversold. The STOCH value of 34.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5406.
Kobe Steel Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | ¥184.25B | 27.66 | 5.06% | 1.80% | 1.69% | 71.95% | |
69 Neutral | ¥765.20B | 7.95 | 10.78% | 4.68% | -4.64% | -21.94% | |
62 Neutral | ¥384.49B | 8.38 | 6.16% | 2.99% | 0.55% | 20.51% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
60 Neutral | ¥188.38B | 19.21 | 7.36% | 3.42% | -17.96% | -43.14% | |
50 Neutral | ¥2.96T | 175.42 | -0.26% | 4.53% | 15.73% | -95.40% | |
49 Neutral | ¥982.30B | 16.46 | 2.09% | 4.59% | -6.59% | -23.63% |
* Basic Materials Sector Average
JP:5406
Kobe Steel
1,946.50
352.23
22.09%
JP:5471
Daido Steel Co
1,868.00
927.83
98.69%
JP:5411
JFE Holdings
1,635.00
30.16
1.88%
JP:5401
NIPPON STEEL
553.50
-9.81
-1.74%
JP:5423
Tokyo Steel Manufacturing Co
1,725.00
254.69
17.32%
JP:5482
Aichi Steel Corporation
2,878.00
1,090.41
61.00%
Kobe Steel Corporate Events
Kobe Steel boosts board stock compensation trust with ¥1.08 billion
May 11, 2026
Kobe Steel’s board has approved an additional entrustment of funds to its Board Benefit Trust, a stock-based compensation plan for directors originally introduced in 2016. The move is intended to ensure sufficient shares are available for fu...
Kobe Steel to Fully Integrate Kobelco Wire via Share Exchange and TSE Delisting
May 11, 2026
Kobe Steel will make KOBELCO WIRE COMPANY, LTD. a wholly owned subsidiary through a share exchange in which Kobe Steel becomes the parent and Kobelco Wire the subsidiary, under a simplified procedure not requiring Kobe Steel shareholder approval. ...
Kobe Steel Releases Fiscal 2025 Results and Fiscal 2026 Outlook
May 11, 2026
Kobe Steel reported its consolidated financial results for fiscal 2025 and provided an outlook for fiscal 2026, outlining performance by segment and expected trends. The company also detailed its approach to shareholder returns, signaling how it p...
Kobe Steel Earnings Fall but Balance Sheet and Equity Ratio Strengthen
May 11, 2026
Kobe Steel reported consolidated net sales of ¥2.44 trillion for the fiscal year ended March 31, 2026, down 4.6% year on year, with operating profit falling 18.2% to ¥129.9 billion and profit attributable to owners of parent declining 22...
Kobe Steel Revamps Board Lineup Ahead of June 2026 Shareholders Meeting
Mar 4, 2026
Kobe Steel, Ltd. has announced a slate of director candidates and representative directors to be submitted for approval at its 173rd Ordinary General Meeting of Shareholders scheduled for late June 2026. The proposed structure confirms President a...
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.