Kobe Steel (5406) AI Stock Analysis

• Market Cap: $624.89B
• Dividend Yield: 6.94%
• Average Volume (3M): 1.83M
• 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: 70
• Industry: Steel
• EPS (TTM): 44.06
• Shares Outstanding: 396,345,980
• 10 Day Avg. Volume: 2,214,280
• 30 Day Avg. Volume: 1,830,726
• 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: $1,799.62
• Price Target Upside: 11.19% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 78 Outperform
• Price Target: ¥1,872.00 ▲(15.66%Upside)

Kobe Steel's strong financial performance, particularly in profitability and cash flow management, is complemented by an attractive valuation with a low P/E ratio and high dividend yield. The technical indicators show mixed signals, with slight positive trends but bearish momentum, which tempers the overall bullish outlook.

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, hot rolled, cold rolled, electro-galvanized, and hot-dipped galvanized steel sheets; steel wire rods and bars; and aluminum and steel plates. It also provides steel casting and forging products, such as crankshafts, marine parts, chemical processing equipment, and rolls, as well as materials for plastic molding; and titanium products, copper sheets and strips, and steel powders. In addition, the company offers robots and electric power sources, and welding materials; and machinery products, such as standard compressors, tire and rubber machinery products, rotating machinery products, plastic processing machinery products, advanced technology equipment, rolling mill products, and ultra high pressure equipment, as well as LNG vaporizers, pressure vessels, brazed aluminum heat exchangers, and micro channel heat exchanger and reactors. Further, it provides signaling, communication, power supply, automatic fare collection, and platform screen door systems; hydraulic and mini hydraulic excavators, mini wheel loaders, and road machinery; construction, metal, forestry, and industrial waste recycling machinery; and crawler and wheel cranes. Additionally, the company generates and supplies electric power; offers material and structural analysis, testing, physical analysis, and other services; manufactures and sells target materials and test equipment; sells and rents detached homes; and provides brokerage, renovation, insurance, and other services, as well as operational management services of public facilities. It also offers services in the field of iron units; and water treatment, waste incineration, PCB detoxification, and soil remediation services. The company was founded in 1905 and is headquartered in Kobe, Japan.

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
EBITDA	255.08B	296.53B	224.49B	202.92B	131.49B	49.13B
Net Income	102.64B	109.55B	72.57B	60.08B	23.23B	-68.01B
Balance Sheet
Total Assets	2.87T	2.92T	2.87T	2.73T	2.58T	2.41T
Cash, Cash Equivalents and Short-Term Investments	203.38B	278.84B	203.52B	260.70B	317.54B	146.04B
Total Debt	918.80B	863.47B	907.05B	959.87B	1.05T	906.64B
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: Positive
• Last Price: 1618.50
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 1618.5 is above the 20-day moving average (MA) of 1583.60, below the 50-day MA of 1619.97, and above the 200-day MA of 1615.26, indicating a bullish trend. The MACD of -10.57 indicates Negative momentum. The RSI at 61.72 is Neutral, neither overbought nor oversold. The STOCH value of 82.75 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	78 Outperform	$624.89B	5.20	10.71%	6.94%	0.47%	9.83%
Sector *	43 Neutral	AU$1.42B	-6.13	-40.62%	4.05%	-4.78%	-42.91%
DDL		€1.27B	7.05	6.56%	5.18%	―	―
JFEEF		$7.06B	12.39	3.62%	5.68%	―	―
NISTF		$20.61B	8.51	6.77%	5.43%	―	―
TOKSF		$1.16B	7.37	10.08%	3.26%	―	―
8T2		€924.89M	19.90	3.23%	8.72%	―	―

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.