Japan Steel Works (5631) AI Stock Analysis

• Market Cap: €626.16B
• Dividend Yield: 0.89%
• Average Volume (3M): 1.40M
• Price to Earnings (P/E): 34.9
• Beta (1Y): 1.38
• Revenue Growth: -1.56%
• EPS Growth: 25.78%
• Country: JP
• Employees: 5,115
• Sector: Industrials
• Sector Strength: 86
• Industry: Industrial - Machinery
• EPS (TTM): 75.85
• Shares Outstanding: 74,408,980
• 10 Day Avg. Volume: 1,038,060
• 30 Day Avg. Volume: 1,400,806
• PEG Ratio: 1.82
• Price to Book (P/B): 2.41
• 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: €7,200.20
• Price Target Upside: -12.95% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: ¥9,107.00 ▲(10.11%Upside)

Japan Steel Works has a solid financial performance with strong revenue growth and operational efficiency. The technical indicators show strong bullish momentum, although the stock is currently overbought. The high P/E ratio suggests a relatively high valuation, which could limit upside potential unless earnings grow significantly.

Japan Steel Works Business Overview & Revenue Model

Company Description

The Japan Steel Works, Ltd. produces and sells steel and machinery products in Japan, China, and internationally. The company operates through Industrial Machinery Products, Steel and Energy Products, and Other Businesses segments. It offers monobloks rotor shafts for power generators; shell flanges for nuclear reactor pressure vessels; turbine castings for thermal power plants; clad steel plates and pipes; high alloy and stainless steel, and Ni-based alloy products; forged steel rolls for steel mills; forged and cast steel products, steel plates, and pressure vessels for use in chemical and petrochemical industries, and other industrial machineries; and pressure vessels maintenance and inspection services for pressure vehicles. The company also provides plastic production machinery, such as polyolefin pelletizers, twin screw extruders, film and sheet manufacturing equipment, and spinning extruders; injection and blow molding machines; and excimer laser annealing and laser lift-off systems, rolling stock parts, and presses/laminators. In addition, it engages in the design, manufacture, and maintenance of defense equipment from firing systems to missile launchers, as well as R&D on new defense equipment and systems; and offers steel tanks for high-pressure hydrogen storage installed in hydrogen filling stations that are used by fuel cell vehicles. Further, the company is involved in the provision of maintenance concierge, retrofitting, and schooling training services; and provides deposition and crystal, as well as wind power generation equipment. The Japan Steel Works, Ltd. was founded in 1907 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Japan Steel Works generates revenue primarily through its diversified business segments. The materials segment, which involves the production of steel castings and forgings, caters to industries requiring high-strength materials, such as the automotive and energy sectors. The machinery segment is another significant revenue stream, where the company designs and manufactures industrial machinery, including injection molding machines and pelletizers, serving the needs of manufacturers across various industries. Additionally, JSW is involved in the production of environmental recycling equipment, addressing the growing demand for sustainable solutions. Revenue is further bolstered by strategic partnerships and collaborations with other industry leaders, expanding its market reach and enhancing its technological capabilities.

Japan Steel Works Financial Statement Overview

Summary

Japan Steel Works demonstrates strong income statement performance with impressive profit margins and revenue growth. The balance sheet indicates financial stability with moderate leverage and effective equity utilization. However, the cash flow statement is concerning due to missing TTM data, limiting a full assessment of cash generation.

Income Statement

Japan Steel Works demonstrated strong performance in its income statement, with a notable gross profit margin of 24.81% and a net profit margin of 7.04% for TTM (Trailing-Twelve-Months). The company experienced a healthy revenue growth rate of 5.74% from 2023 to 2024. Additionally, the EBIT margin of 9.47% and EBITDA margin of 12.73% show solid operational efficiency and profitability. Overall, these metrics highlight a robust financial health and a consistent growth trajectory.

Balance Sheet

The balance sheet of Japan Steel Works reflects a stable financial position with a debt-to-equity ratio of 0.23, indicating moderate leverage. The return on equity is a strong 9.52%, showcasing effective utilization of equity to generate profits. Moreover, the equity ratio of 49.52% suggests a balanced capital structure. These metrics indicate financial stability and solid asset management, though there is a slight risk due to increasing liabilities.

Cash Flow

Japan Steel Works' cash flow statement shows some areas of concern, as the operating cash flow and free cash flow were not available for TTM (Trailing-Twelve-Months). In the prior annual report, the operating cash flow to net income ratio was 1.52, indicating efficient cash generation relative to net income. However, the absence of current free cash flow metrics limits a comprehensive evaluation of cash flow health.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	251.35B	252.50B	238.72B	213.79B	198.04B	217.53B
Gross Profit	62.40B	57.83B	49.38B	47.82B	42.28B	50.28B
EBITDA	32.01B	27.32B	25.47B	26.37B	19.48B	20.43B
Net Income	17.69B	14.28B	11.97B	13.95B	6.89B	9.31B
Balance Sheet
Total Assets	375.02B	366.77B	348.36B	339.73B	316.25B	297.17B
Cash, Cash Equivalents and Short-Term Investments	72.59B	97.61B	87.29B	106.24B	89.44B	75.53B
Total Debt	42.06B	43.63B	43.42B	58.44B	58.04B	52.06B
Total Liabilities	187.50B	188.16B	187.72B	188.65B	174.26B	164.68B
Stockholders Equity	185.72B	176.98B	159.10B	149.44B	140.40B	130.80B
Cash Flow
Free Cash Flow	0.00	11.46B	-7.09B	13.52B	6.44B	6.13B
Operating Cash Flow	0.00	21.71B	-986.00M	22.32B	14.71B	18.96B
Investing Cash Flow	0.00	-6.84B	947.00M	-2.98B	-3.24B	-13.17B
Financing Cash Flow	0.00	-4.90B	-20.11B	-2.86B	2.77B	-6.16B

Japan Steel Works Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8271.00
• 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:5631, the sentiment is Positive. The current price of 8271 is above the 20-day moving average (MA) of 7689.10, above the 50-day MA of 6707.96, and above the 200-day MA of 5827.15, indicating a bullish trend. The MACD of 470.09 indicates Negative momentum. The RSI at 76.61 is Negative, neither overbought nor oversold. The STOCH value of 96.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5631.

Japan Steel Works Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5631	74 Outperform	€626.16B	34.86	9.67%	0.89%	-1.56%	25.78%
Sector *	67 Neutral	€8.43B	18.55	6.19%	2.63%	2.39%	-39.55%
AMDWF		$3.48B	16.87	6.10%	0.03%	―	―
NGKIF		$3.54B	11.21	7.66%	2.93%	―	―
SOHVF		$2.51B	1,011.71	0.06%	3.80%	―	―
THKLF		$3.27B	57.37	2.48%	5.93%	―	―
6406	73 Outperform	¥469.75B	33.28		2.91%	5.17%	-18.61%

Japan Steel Works Corporate Events

Japan Steel Works Issues New Stocks for Compensation Plan

Japan Steel Works has announced the issuance of new stocks as part of a Restricted Stock Compensation Plan aimed at incentivizing directors and executive officers for sustainable corporate growth. This initiative is designed to align the interests of management with shareholders and enhance corporate value over the medium to long term, with a transfer restriction period set for five years.

The most recent analyst rating on (JP:5631) stock is a Buy with a Yen6200.00 price target. To see the full list of analyst forecasts on Japan Steel Works stock, see the JP:5631 Stock Forecast page.

Japan Steel Works Considers Investment Unit Reduction

Japan Steel Works, Ltd. is considering reducing its investment unit to less than 500,000 yen to stimulate an active equity market and increase share liquidity. The company plans to carefully evaluate stock market trends and its stock price level to decide on the timing and appropriateness of this reduction, potentially impacting its market positioning and investor engagement.

The most recent analyst rating on (JP:5631) stock is a Buy with a Yen6200.00 price target. To see the full list of analyst forecasts on Japan Steel Works stock, see the JP:5631 Stock Forecast page.

Japan Steel Works Reports Profit Growth Despite Sales Decline

Japan Steel Works reported a decrease in net sales by 1.6% for the fiscal year ending March 31, 2025, but saw significant increases in operating profit and profit attributable to owners of parent by 26.7% and 25.8% respectively. The company anticipates a positive outlook for the next fiscal year, forecasting a 16.7% increase in net sales and continued growth in operating and ordinary profits, indicating a strong recovery and strategic positioning in the market.

The most recent analyst rating on (JP:5631) stock is a Buy with a Yen6200.00 price target. To see the full list of analyst forecasts on Japan Steel Works stock, see the JP:5631 Stock Forecast page.

Japan Steel Works Announces Increased Year-End Dividend

Japan Steel Works has announced a decision to increase its year-end dividend to 48 yen per share, resulting in a total annual dividend of 86 yen per share for the fiscal year ending March 2025. This decision reflects the company’s strategy to provide stable and improved dividends, aligning with its Medium-Term Management Plan JGP2028, which targets a dividend payout ratio of 35% or higher.

The most recent analyst rating on (JP:5631) stock is a Buy with a Yen5000.00 price target. To see the full list of analyst forecasts on Japan Steel Works stock, see the JP:5631 Stock Forecast page.

Japan Steel Works Reports Profit Growth Despite Sales Dip

Japan Steel Works reported a slight decline in net sales for the fiscal year ending March 31, 2025, but saw significant increases in operating and ordinary profits. The company experienced a notable rise in profit attributable to owners, reflecting improved operational efficiency. Despite a decrease in cash flows from operating activities, the company increased its annual dividends per share, indicating confidence in future performance. The forecast for the fiscal year ending March 31, 2026, suggests a positive outlook with expected growth in net sales and profits.

The most recent analyst rating on (JP:5631) stock is a Buy with a Yen5000.00 price target. To see the full list of analyst forecasts on Japan Steel Works stock, see the JP:5631 Stock Forecast page.

Japan Steel Works Announces Strategic Merger with Subsidiary M&E

Japan Steel Works, Ltd. has announced a policy to merge its wholly owned subsidiary, Japan Steel Works M&E, Inc., through an absorption-type merger effective April 1, 2026. This strategic move aims to ensure sustainable growth in the Material and Engineering Business by integrating operations to meet increasing global demand for electricity and metal products, and to enhance synergies within the group, particularly in defense equipment production. The merger is also expected to strengthen corporate governance and maximize corporate value by consolidating management resources and technological development efforts.