Kobe Steel (5406) AI Stock Analysis

• Market Cap: $704.90B
• Dividend Yield: 5.59%
• Average Volume (3M): 2.09M
• Price to Earnings (P/E): 5.2
• Beta (1Y): 1.06
• Revenue Growth: -0.07%
• EPS Growth: 24.81%
• Country: JP
• Employees: 38,050
• Sector: Basic Materials
• Sector Strength: 55
• Industry: Steel
• EPS (TTM): 98.03
• Shares Outstanding: 396,345,980
• 10 Day Avg. Volume: 2,235,480
• 30 Day Avg. Volume: 2,087,136
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.96
• Enterprise Value/Revenue: 0.54
• Enterprise Value/Gross Profit: 3.19
• Enterprise Value/Ebitda: 5.41
• 1Y Price Target: $1,755.16
• Price Target Upside: -1.95% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 81 Outperform
• Price Target: ¥1,868.00 ▲(4.36% Upside)

Kobe Steel's strong financial performance and attractive valuation are the primary drivers of its overall score. The company's robust profitability and cash flow management are complemented by an undervalued P/E ratio and high dividend yield, making it an appealing investment. Technical indicators show stable momentum, supporting the positive outlook.

Kobe Steel Business Overview & Revenue Model

Company Description

Kobe Steel, Ltd. (5406), also known as Kobelco, is a prominent Japanese industrial conglomerate headquartered in Kobe, Japan. The company operates across several sectors, including steel production, aluminum and copper products, machinery, construction equipment, and electric power. Kobe Steel is recognized for its wide range of high-quality materials and machinery that serve diverse industries such as automotive, construction, and manufacturing. Its core products include steel sheets, aluminum and copper rolled products, industrial machinery, and welding equipment.

How the Company Makes Money

Kobe Steel generates revenue through various segments, with the primary source being the production and sale of steel products. The company's steel business involves manufacturing and distributing steel sheets and plates, which are integral to automotive and construction industries. Another significant revenue stream comes from its aluminum and copper segment, where it provides rolled products used extensively in electronics and transportation. The machinery segment contributes to earnings through the sale of construction equipment and industrial machinery. Additionally, Kobe Steel has ventured into the electric power sector, where it generates and sells electricity. Strategic partnerships and joint ventures, particularly in the automotive and aerospace industries, also play a crucial role in enhancing its revenue and market presence.

Kobe Steel Financial Statement Overview

Summary

Kobe Steel demonstrates strong financial performance with robust profitability and a stable financial structure. The income statement shows strong revenue growth and profitability, though recent revenue growth has slowed. The balance sheet reflects a solid equity base and moderate leverage, while cash flow management indicates effective cash generation despite some variability.

Income Statement

Kobe Steel has demonstrated strong revenue growth over the years, particularly from 2021 to 2025. The company's gross profit margin has remained robust, and there's a consistent increase in net income, highlighting improved profitability. The EBIT and EBITDA margins also show a healthy operational performance. However, the revenue growth rate has slowed recently, indicating potential challenges in market expansion.

Balance Sheet

The company maintains a solid equity base, with a return on equity that reflects efficient utilization of shareholder funds. The debt-to-equity ratio is moderate, suggesting a balanced approach to leverage, though total debt remains significant. The equity ratio indicates a stable financial structure with a good proportion of assets funded by equity.

Cash Flow

Kobe Steel shows a strong operating cash flow to net income ratio, indicating effective cash generation from its operations. The free cash flow to net income ratio also underscores good cash conversion. However, fluctuations in free cash flow growth rate suggest variability in capital expenditure and investment activities over the period.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.56T	2.54T	2.47T	2.08T	1.71T
Gross Profit	423.22B	446.60B	321.29B	307.80B	223.19B
EBITDA	271.92B	296.53B	224.49B	202.92B	131.49B
Net Income	120.18B	109.55B	72.57B	60.08B	23.23B
Balance Sheet
Total Assets	2.89T	2.92T	2.87T	2.73T	2.58T
Cash, Cash Equivalents and Short-Term Investments	220.12B	278.84B	203.52B	260.70B	317.54B
Total Debt	886.33B	863.47B	907.05B	959.87B	1.05T
Total Liabilities	1.65T	1.79T	1.90T	1.86T	1.81T
Stockholders Equity	1.16T	1.06T	913.96B	815.33B	710.36B
Cash Flow
Free Cash Flow	34.99B	110.42B	20.73B	12.36B	21.58B
Operating Cash Flow	148.26B	205.28B	119.69B	168.81B	194.80B
Investing Cash Flow	-113.87B	-53.72B	-97.27B	-161.51B	-141.85B
Financing Cash Flow	-96.23B	-81.21B	-85.56B	-69.14B	118.44B

Kobe Steel Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1790.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 1790 is above the 20-day moving average (MA) of 1703.42, above the 50-day MA of 1637.80, and above the 200-day MA of 1621.94, indicating a bullish trend. The MACD of 41.37 indicates Negative momentum. The RSI at 72.31 is Negative, neither overbought nor oversold. The STOCH value of 95.24 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5406.

Kobe Steel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5406	81 Outperform	$704.90B	5.23	12.39%	5.59%	-0.07%	24.81%
5482	78 Outperform	€164.53B	18.88	4.65%	1.56%	2.65%	97.66%
5471	75 Outperform	€265.87B	9.19	6.87%	3.78%	-1.07%	-43.26%
5423	73 Outperform	$174.51B	9.19	8.92%	3.13%	-14.44%	-25.56%
Sector *	70 Outperform	¥181.75B	11.39	5.69%	3.06%	2.67%	-11.84%
5411	64 Neutral	$1.07T	15.91	2.90%	5.52%	-7.02%	-57.67%
5401	63 Neutral	$3.13T	8.32	-0.24%	5.26%	-3.92%	-100.05%

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.