Kobe Steel (5406) AI Stock Analysis

• Market Cap: $709.57B
• Dividend Yield: 4.82%
• Average Volume (3M): 1.84M
• Price to Earnings (P/E): 5.3
• Beta (1Y): 0.94
• Revenue Growth: -1.97%
• EPS Growth: 47.63%
• Country: JP
• Employees: 38,050
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 61.46
• Shares Outstanding: 396,345,980
• 10 Day Avg. Volume: 1,901,770
• 30 Day Avg. Volume: 1,835,069
• PEG Ratio: 0.58
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 0.27
• P/FCF Ratio: 19.50
• Enterprise Value/Market Cap: 1.95
• Enterprise Value/Revenue: 0.55
• Enterprise Value/Gross Profit: 3.25
• Enterprise Value/Ebitda: 6.34
• 1Y Price Target: $1,811.06
• Price Target Upside: -11.87% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 80 Outperform
• Price Target: ¥2,226.00 ▲(8.32% Upside)

Kobe Steel's strong financial performance and attractive valuation are the primary drivers of its high score. While technical indicators suggest bullish momentum, caution is advised due to potential overbought conditions. The absence of earnings call data and corporate events does not detract from the overall positive outlook.

Positive Factors

Cash Flow Management

Kobe Steel's ability to generate cash efficiently from operations ensures it can fund growth initiatives and manage debt, supporting long-term stability.

Profitability

Sustained profitability indicates strong operational performance and competitive positioning, enabling reinvestment in core business areas.

Balance Sheet Health

A strong balance sheet with moderate leverage provides financial flexibility and resilience against economic downturns.

Negative Factors

Revenue Growth Slowdown

Slowing revenue growth could indicate market saturation or increased competition, potentially impacting future earnings and market share.

Debt Levels

High debt levels can limit strategic flexibility and increase financial risk, especially if cash flow variability persists.

Free Cash Flow Variability

Variability in free cash flow suggests potential challenges in managing capital expenditures, which could affect investment capacity and financial planning.

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 multiple key streams, primarily from the sale of steel products, which are essential for construction, automotive, and infrastructure projects. Their aluminum and copper segments also contribute significantly to revenue, catering to industries such as aerospace, electronics, and packaging. Additionally, Kobe Steel earns income from its machinery and engineering services, which include the design and manufacturing of industrial equipment and systems. The company benefits from strategic partnerships and collaborations with other firms in various sectors, enhancing its market reach and technological capabilities. Moreover, factors such as global demand for steel and metals, fluctuations in commodity prices, and advancements in manufacturing processes play a crucial role in shaping its earnings.

Kobe Steel Financial Statement Overview

Summary

Kobe Steel exhibits strong financial performance with robust profitability, stable leverage, and effective cash flow management. The company has shown consistent revenue and net income growth, although recent revenue growth has slowed. The balance sheet reflects a solid equity base and moderate debt levels, while cash flow management remains effective despite some variability in free cash flow growth.

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	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.53T	2.56T	2.54T	2.47T	2.08T	1.71T
Gross Profit	424.80B	423.22B	435.99B	321.29B	307.80B	223.19B
EBITDA	217.71B	277.44B	296.00B	223.91B	202.40B	131.25B
Net Income	134.77B	120.18B	109.55B	72.57B	60.08B	23.23B
Balance Sheet
Total Assets	2.82T	2.89T	2.92T	2.87T	2.73T	2.58T
Cash, Cash Equivalents and Short-Term Investments	175.61B	220.12B	278.84B	203.52B	260.70B	317.54B
Total Debt	867.52B	886.33B	863.47B	907.05B	959.87B	1.05T
Total Liabilities	1.60T	1.65T	1.79T	1.90T	1.86T	1.81T
Stockholders Equity	1.15T	1.16T	1.06T	913.96B	815.33B	710.36B
Cash Flow
Free Cash Flow	0.00	34.99B	110.42B	20.73B	12.36B	21.58B
Operating Cash Flow	0.00	148.26B	205.28B	119.69B	168.81B	194.80B
Investing Cash Flow	0.00	-113.87B	-53.72B	-97.27B	-161.51B	-141.85B
Financing Cash Flow	0.00	-96.23B	-81.21B	-85.56B	-69.14B	118.44B

Kobe Steel Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2055.00
• 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 2055 is above the 20-day moving average (MA) of 1930.83, above the 50-day MA of 1841.15, and above the 200-day MA of 1703.68, indicating a bullish trend. The MACD of 43.28 indicates Negative momentum. The RSI at 72.73 is Negative, neither overbought nor oversold. The STOCH value of 86.39 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
5471	82 Outperform	€296.91B	10.23	6.84%	3.10%	-0.02%	-40.45%
5406	80 Outperform	$709.57B	5.28	10.78%	4.82%	-1.97%	47.63%
5423	73 Outperform	$147.86B	8.92	7.36%	3.48%	-18.72%	-25.26%
5482	72 Outperform	€175.80B	17.04	5.06%	1.89%	4.10%	152.90%
5401	63 Neutral	$3.36T	-10,379.54	-0.26%	4.52%	1.31%	-101.19%
5411	62 Neutral	$1.10T	15.30	2.92%	4.62%	-8.07%	-41.42%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Kobe Steel Corporate Events

Kobe Steel Adjusts Convertible Bond Conversion Prices Following Dividend

Kobe Steel, Ltd. has announced an adjustment in the conversion price for its Zero Coupon Convertible Bonds due in 2028 and 2030, effective from October 1, 2025. This adjustment follows the payment of an extraordinary interim dividend of ¥40 per share, approved by the company’s board of directors, which has implications for the company’s financial strategies and investor relations.

Kobe Steel Reports Financial Results for First Half of 2025

Kobe Steel reported a decrease in net sales and operating profits for the six months ending September 30, 2025, compared to the previous year. Despite the decline, the company saw an increase in profit attributable to owners, indicating some resilience in its financial performance. The equity-to-asset ratio improved slightly, reflecting a stable financial position. The company also revised its full-year earnings forecast, suggesting a cautious outlook amid changing market conditions.