Japan Steel Works (5631) AI Stock Analysis

• Market Cap: €724.49B
• Dividend Yield: 0.95%
• Average Volume (3M): 946.71K
• Price to Earnings (P/E): 38.7
• Beta (1Y): 1.36
• Revenue Growth: 10.11%
• EPS Growth: 41.98%
• Country: JP
• Employees: 5,115
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 77.58
• Shares Outstanding: 74,415,910
• 10 Day Avg. Volume: 1,238,970
• 30 Day Avg. Volume: 946,713
• PEG Ratio: 0.83
• Price to Book (P/B): 1.99
• Price to Sales (P/S): 1.55
• P/FCF Ratio: -18.89
• 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: €12,034.79
• Price Target Upside: 40.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: ¥8,943.00 ▲(4.09% Upside)

Japan Steel Works' stock score is primarily influenced by its strong financial performance, particularly in revenue growth and operational efficiency. However, technical indicators suggest a bearish trend, and the valuation indicates the stock may be overvalued. Cash flow challenges also pose a risk to future financial stability.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and competitiveness.

Operational Efficiency

Improved margins reflect enhanced operational efficiency, boosting profitability and providing a buffer against market fluctuations.

Balance Sheet Health

A strong balance sheet with low leverage and high equity ratio ensures financial stability and flexibility for future investments.

Negative Factors

Cash Flow Challenges

Negative free cash flow indicates challenges in cash generation, potentially impacting the company's ability to fund operations and growth.

Net Profit Margin Pressure

Decreasing net profit margins suggest rising costs or pricing pressures, which could affect long-term profitability if not managed.

Cash Conversion Issues

Negative cash conversion indicates inefficiencies in turning earnings into cash, which may constrain financial flexibility and investment capacity.

Japan Steel Works Business Overview & Revenue Model

Company Description

Japan Steel Works (JSW) is a leading Japanese manufacturer specializing in the production of steel and various industrial machinery. Established in 1907, the company operates primarily in sectors such as steel manufacturing, heavy machinery, and environmental equipment. Its core products include steel plates, castings, and forgings, which serve various industries including construction, energy, and transportation. JSW is known for its commitment to innovation and quality, supplying advanced materials and solutions for both domestic and international markets.

How the Company Makes Money

Japan Steel Works generates revenue through multiple streams, primarily from the sale of its steel products, which include high-quality steel plates and specialized alloys used in construction and manufacturing. The company also earns income from its machinery division, which produces heavy machinery and equipment for industrial applications. Additional revenue is generated from providing environmental solutions and equipment, catering to the growing demand for sustainable practices. Strategic partnerships with major industries and government contracts further enhance its earnings, as JSW collaborates with key players in sectors such as energy and infrastructure to deliver customized solutions. The company's focus on research and development ensures a continuous pipeline of innovative products, positioning it well in competitive markets.

Japan Steel Works Financial Statement Overview

Summary

Japan Steel Works demonstrates strong revenue growth and operational efficiency with solid balance sheet metrics. However, cash flow management poses challenges, warranting attention to improve cash conversion and free cash flow generation to sustain future growth and financial stability.

Income Statement

Japan Steel Works shows a consistent revenue stream with noticeable growth. The Gross Profit Margin is strong at approximately 24.5% for 2025. However, the Net Profit Margin has slightly decreased to 7.2% in 2025 from 5.9% in 2024, reflecting some pressure on net earnings. The EBIT and EBITDA margins have improved to 9.2% and 12.7% respectively, indicating better operational efficiency.

Balance Sheet

The company maintains a solid financial structure with a Debt-to-Equity Ratio of approximately 0.23, showing prudent leverage. The Return on Equity (ROE) is fairly robust, around 9.3%, indicating good profitability from shareholders' equity. The Equity Ratio stands strong at about 48.5%, reflecting a balanced capital structure.

Cash Flow

The Cash Flow statement reveals some challenges, particularly with a negative Free Cash Flow of -20.4 billion yen in 2025, down from 11.4 billion yen in 2024. The Operating Cash Flow to Net Income Ratio has turned negative, indicating difficulties in converting earnings into cash flow. The Free Cash Flow to Net Income Ratio reflects constraints in cash generation relative to net income.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	268.50B	248.56B	252.50B	238.72B	213.79B	198.04B
Gross Profit	63.50B	60.99B	56.81B	49.38B	47.82B	42.28B
EBITDA	32.24B	31.56B	27.32B	25.46B	26.36B	19.48B
Net Income	18.72B	17.96B	14.28B	11.97B	13.95B	6.89B
Balance Sheet
Total Assets	395.64B	398.12B	366.77B	348.36B	339.73B	316.25B
Cash, Cash Equivalents and Short-Term Investments	90.35B	75.90B	97.61B	87.29B	106.24B	89.44B
Total Debt	56.87B	43.53B	43.63B	43.42B	58.44B	58.04B
Total Liabilities	200.44B	203.02B	188.16B	187.72B	188.65B	174.26B
Stockholders Equity	193.94B	193.22B	176.98B	159.10B	149.44B	140.40B
Cash Flow
Free Cash Flow	0.00	-20.40B	11.46B	-7.09B	13.52B	6.44B
Operating Cash Flow	0.00	-4.57B	21.71B	-986.00M	22.32B	14.71B
Investing Cash Flow	0.00	-12.27B	-6.84B	947.00M	-2.98B	-3.24B
Financing Cash Flow	0.00	-5.72B	-4.90B	-20.11B	-2.86B	2.77B

Japan Steel Works Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8592.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5631, the sentiment is Negative. The current price of 8592 is below the 20-day moving average (MA) of 9191.35, below the 50-day MA of 9402.44, and above the 200-day MA of 7687.36, indicating a neutral trend. The MACD of -217.55 indicates Positive momentum. The RSI at 41.22 is Neutral, neither overbought nor oversold. The STOCH value of 9.71 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5631.

Japan Steel Works Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5333	73 Outperform	$788.35B	15.38	7.13%	2.35%	8.91%	12.03%
6113	70 Outperform	¥587.51B	21.54	5.14%	3.38%	-1.14%	-19.79%
6406	70 Outperform	¥431.72B	30.66	―	2.99%	0.32%	-15.41%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5631	59 Neutral	€724.49B	38.70	11.66%	0.95%	10.11%	41.98%
6302	59 Neutral	¥505.94B	149.35	0.59%	2.94%	-2.67%	-85.21%
6481	53 Neutral	$466.79B	70.03	1.88%	6.27%	1.98%	-48.28%

Japan Steel Works Corporate Events

Japan Steel Works Reports Strong Financial Growth in First Half of 2025

Japan Steel Works reported a significant increase in its consolidated financial results for the six months ending September 30, 2025, with net sales rising by 25.3% and profit attributable to owners of the parent increasing by 67.9% year-on-year. The company’s strong performance is reflected in its improved equity-to-asset ratio and increased dividends, indicating a positive outlook for stakeholders.

The most recent analyst rating on (JP:5631) stock is a Hold with a Yen9187.00 price target. To see the full list of analyst forecasts on Japan Steel Works stock, see the JP:5631 Stock Forecast page.