Kobe Steel (5406) AI Stock Analysis

• Market Cap: $638.09B
• Dividend Yield: 5.32%
• Average Volume (3M): 1.88M
• Price to Earnings (P/E): 5.2
• Beta (1Y): 1.07
• Revenue Growth: 0.47%
• EPS Growth: 9.83%
• Country: JP
• Employees: 38,050
• Sector: Basic Materials
• Sector Strength: 68
• Industry: Steel
• EPS (TTM): 44.06
• Shares Outstanding: 396,345,980
• 10 Day Avg. Volume: 1,570,930
• 30 Day Avg. Volume: 1,882,516
• PEG Ratio: 0.32
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: $1,740.63
• Price Target Upside: 9.40% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 76 Outperform
• Price Target: ¥1,830.00 ▲(15.02%Upside)

Kobe Steel's overall stock score reflects its strong financial performance and attractive valuation. The company's robust profitability and stable financial structure are significant strengths. However, technical indicators suggest caution due to potential downward trends and lack of bullish momentum, which slightly offsets the positive financial outlook.

Kobe Steel Business Overview & Revenue Model

Company Description

Kobe Steel, Ltd. (5406), commonly known as Kobelco, is a diversified industrial conglomerate headquartered in Japan. It operates across several sectors, including iron and steel, aluminum and copper, machinery, construction machinery, engineering, and environmental solutions. The company is known for producing high-quality steel products, aluminum and copper products, and is also involved in the manufacturing of industrial machinery and equipment, as well as providing engineering and construction services.

How the Company Makes Money

Kobe Steel generates revenue through its various business segments, primarily by producing and selling materials such as steel, aluminum, and copper, which are essential in manufacturing and construction industries. The company's iron and steel segment is a significant source of income, supplying products for automotive, shipbuilding, and infrastructure projects. Additionally, the aluminum and copper segment contributes to earnings by providing materials for electronics, transportation, and packaging. Sales of industrial machinery, such as compressors and construction equipment, further diversify Kobe Steel's revenue streams. The company also earns income from its engineering services, which involve project management and construction solutions for industrial facilities and infrastructure projects. Strategic partnerships and joint ventures with other global companies often enhance its market reach and technological capabilities, further bolstering its financial performance.

Kobe Steel Financial Statement Overview

Summary

Kobe Steel demonstrates robust revenue and profit growth, supported by effective cost management and improved margins. The balance sheet reflects controlled leverage and decent equity returns. However, cash flow management is a concern due to missing recent data, indicating potential operational cash management issues.

Income Statement

Kobe Steel shows a solid performance with a consistent revenue growth trend from 2020 to TTM 2024. Gross profit and net profit margins have improved significantly, highlighting enhanced cost management and profitability. The EBIT and EBITDA margins are stable, indicating operational efficiency. However, the recent decline in gross profit margin in TTM 2024 compared to 2023 raises some concern.

Balance Sheet

The company maintains a healthy balance sheet with an improving debt-to-equity ratio, indicating effective management of leverage. Return on Equity (ROE) has shown a positive trend, reflecting the company's ability to generate profits from shareholders' equity. However, the equity ratio needs improvement to ensure financial stability, given the industry's capital-intensive nature.

Cash Flow

Kobe Steel's cash flow statement indicates challenges, with no operating or free cash flow reported in TTM 2024. Despite previous positive growth in free cash flow, the current lack of data suggests potential operational cash management issues. The company needs to ensure consistent operating cash flow to support its net income levels.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
2.55T	2.54T	2.47T	2.08T	1.71T	1.87T
	Gross Profit
433.27B	446.60B	321.29B	307.80B	223.19B	231.10B
	EBIT
172.92B	186.63B	86.36B	87.62B	30.40B	9.86B
	EBITDA
255.08B	296.53B	224.49B	202.92B	131.49B	49.13B
	Net Income Common Stockholders
102.64B	109.55B	72.57B	60.08B	23.23B	-68.01B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
203.38B	278.84B	203.52B	260.70B	317.54B	146.04B
	Total Assets
2.87T	2.92T	2.87T	2.73T	2.58T	2.41T
	Total Debt
918.80B	863.47B	907.05B	959.87B	1.05T	906.64B
	Net Debt
715.42B	584.63B	703.53B	716.37B	785.43B	760.59B
	Total Liabilities
1.68T	1.79T	1.90T	1.86T	1.81T	1.69T
	Stockholders Equity
1.11T	1.06T	913.96B	815.33B	710.36B	656.88B
Cash Flow		Free Cash Flow
0.00	110.42B	20.73B	12.36B	21.58B	-218.35B
	Operating Cash Flow
0.00	205.28B	119.69B	168.81B	194.80B	27.04B
	Investing Cash Flow
0.00	-53.72B	-97.27B	-161.51B	-141.85B	-218.99B
	Financing Cash Flow
0.00	-81.21B	-85.56B	-69.14B	118.44B	140.59B

Kobe Steel Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1591.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5406, the sentiment is Negative. The current price of 1591 is below the 20-day moving average (MA) of 1633.10, below the 50-day MA of 1627.40, and below the 200-day MA of 1621.60, indicating a bearish trend. The MACD of -9.30 indicates Positive momentum. The RSI at 37.92 is Neutral, neither overbought nor oversold. The STOCH value of 24.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5406.

Kobe Steel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5406	76 Outperform	$638.09B	5.22	10.71%	5.32%	0.47%	9.83%
5423	73 Outperform	$164.03B	7.49	10.08%	3.46%	-11.02%	-21.84%
5401	72 Outperform	$3.00T	8.06	6.77%	5.39%	-1.95%	-41.23%
5411	69 Neutral	$1.02T	11.64	3.62%	5.85%	-6.09%	-55.53%
5471	68 Neutral	€220.53B	7.49	6.56%	5.10%	-1.09%	-42.36%
5482	66 Neutral	€155.83B	20.35	3.23%	2.09%	0.93%	19.15%
Sector *	51 Neutral	$2.04B	-1.23	-21.09%	3.96%	2.90%	-30.45%

Kobe Steel Corporate Events

Kobe Steel Completes Strategic Share Repurchase

Kobe Steel has completed the repurchase of 1,900,000 of its common shares, amounting to approximately 3.11 billion yen, as per the resolution passed by its Board of Directors. This strategic move, executed through market purchases on the Tokyo Stock Exchange, reflects the company’s efforts to optimize its capital structure and potentially enhance shareholder value.

The most recent analyst rating on (JP:5406) stock is a Hold with a Yen1740.00 price target. To see the full list of analyst forecasts on Kobe Steel stock, see the JP:5406 Stock Forecast page.

Kobe Steel Adjusts Convertible Bond Conversion Prices Following Dividend Approval

Kobe Steel, Ltd. announced an adjustment to the conversion price of its Zero Coupon Convertible Bonds due in 2028 and 2030. This adjustment, effective April 1, 2025, is a result of an extraordinary dividend payment approved by the board, impacting the conversion prices to ¥2,264.4 and ¥2,166.2 respectively, reflecting the company’s financial strategies and shareholder value enhancement.

The most recent analyst rating on (JP:5406) stock is a Hold with a Yen1740.00 price target. To see the full list of analyst forecasts on Kobe Steel stock, see the JP:5406 Stock Forecast page.

Kobe Steel to Repurchase Shares for Strategic Subsidiary Acquisition

Kobe Steel, Ltd. has announced a resolution to repurchase up to 1.9 million of its common shares, valued at a maximum of 3.9 billion yen, between May 13 and June 9, 2025. This move is part of a strategic plan to make Nippon Koshuha Steel Co., Ltd. a wholly-owned subsidiary, facilitating a share exchange and subsequent transfer of shares to Daido Steel Co., Ltd.

Kobe Steel to Acquire Nippon Koshuha Steel in Strategic Share Exchange

Kobe Steel, Ltd. has announced a share exchange agreement to make Nippon Koshuha Steel Co., Ltd. a wholly owned subsidiary, with plans to transfer shares to Daido Steel Co., Ltd. This strategic move, pending regulatory approvals, aims to strengthen Kobe Steel’s market position and streamline operations, with the share exchange expected to be completed by February 2026. The delisting of Nippon Koshuha Steel from the Tokyo Stock Exchange is scheduled for January 2026, signaling a significant restructuring within the company.

Kobe Steel Reports 2025 Financial Results with Increased Sales and Dividend

Kobe Steel reported consolidated financial results for the fiscal year ended March 31, 2025, showing a slight increase in net sales by 0.5% to 2,555,031 million yen, while operating profit decreased by 15% to 158,721 million yen. The company also announced a dividend increase, reflecting a stable financial position despite a decline in comprehensive income by 21.6%, and highlighted changes in its consolidation scope with the inclusion of Kansai Coke & Chemicals Co., Ltd. and exclusion of Kobelco Automotive Aluminum Rolled Products (China) Co., Ltd.

Osaka High Court Dismisses Appeal Against Kobe Steel’s Power Plant Operations

Kobe Steel, Ltd. announced that the Osaka High Court has dismissed an appeal against the company and its subsidiary regarding the construction of new power plant units. The appeal was filed by local residents concerned about environmental impacts, but the court’s decision supports the continuation of operations, indicating no impact on Kobe Steel’s business performance.