Nippon Light Metal Holdings Co (5703) AI Stock Analysis

• Market Cap: ¥175.73B
• Dividend Yield: 3.02%
• Average Volume (3M): 289.51K
• Price to Earnings (P/E): 6.5
• Beta (1Y): 0.85
• Revenue Growth: 6.23%
• EPS Growth: 11.86%
• Country: JP
• Employees: 12,489
• Sector: General
• Sector Strength: N/A
• Industry: Aluminum
• EPS (TTM): N/A
• Shares Outstanding: 61,993,750
• 10 Day Avg. Volume: 248,620
• 30 Day Avg. Volume: 289,510
• PEG Ratio: 0.20
• Price to Book (P/B): 0.40
• Price to Sales (P/S): 0.17
• P/FCF Ratio: -11.78
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: ¥3,210.00 ▲(25.34% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is driven primarily by solid financial performance (growth and profitability with a stable balance sheet), partially offset by weakening free cash flow. Technicals are constructive with price above major moving averages and positive momentum, while valuation appears reasonable with a moderate P/E and a supportive dividend yield.

Positive Factors

Integrated aluminum value chain

Nippon Light Metal’s integrated footprint across smelting, processing and upstream/intermediate businesses supports durable customer relationships, product-mix flexibility and vertical cost control. This structure helps sustain margins and revenue resilience across industry cycles over months.

Consistent revenue and EPS growth

Stable top-line expansion and double-digit EPS growth reflect improving operational execution and pricing or mix gains. Persisting revenue and earnings momentum supports reinvestment capacity and predictable cash generation over a 2–6 month horizon, aiding planning and capital allocation.

Stable balance sheet with moderate leverage

A healthy equity ratio and prudent leverage provide financial flexibility to fund capex and working capital without acute refinancing risk. This stability enhances resilience to cyclical downturns and underpins sustained operations and investment capability in the near-to-medium term.

Negative Factors

Declining free cash flow from higher capex

Rising capital spending that reduces free cash flow can constrain liquidity and limit discretionary uses like dividends or bolt-on investments. If capex remains elevated, the company may face increased reliance on operating conversion or external funding, affecting flexibility over coming quarters.

Operational efficiency and margin improvement needed

Although gross and net margins are solid, weaker EBIT/EBITDA relative to peers suggests efficiency gaps. Without structural cost or productivity improvements, margins may compress when input costs rise, limiting sustainable profitability and cash generation over the medium term.

Exposure to raw-material and energy cost volatility

Heavy sensitivity to aluminum benchmarks and energy costs creates structural margin volatility. The company's reliance on passing through metal-price moves may be imperfect, leaving earnings and free cash flow exposed to commodity swings and energy price trends over months.

Nippon Light Metal Holdings Co Business Overview & Revenue Model

Company Description

Nippon Light Metal Holdings Company, Ltd. manufactures and sells aluminum products and related products in Japan and internationally. The company operates in four segments: Alumina, Chemicals, and Ingot; Sheet and Extruded Products; Fabricated Products and Other; and Foil and Powder Products. The Alumina, Chemicals, and Ingot segment provides aluminum hydroxide, alumina, and various other chemicals for use in a range of fields, including as fire retardants, raw materials for ceramics, and industrial materials for the manufacture of pulp and paper; and aluminum ingots. The Sheet and Extruded Products segment offers aluminum sheets and extrusion products are used in various fields, such as for automotive parts and railway cars in the transport industry, thick sheets and related parts for semiconductor/liquid-crystal manufacturing equipment, and fabricated sheets for PC/tablet bodies in the electrical and electronics industry. The Fabricated Products and Other segment provides truck bodies; commercial refrigerator and freezer panels; fabricated aluminum products for infrastructure, including for civil engineering and construction; and anodized aluminum foil for aluminum electrolytic capacitors, automotive parts, and carbon products. The Aluminum Foil, Powder and Paste segment offers packaging materials for food and medical products, products for electronics, and aluminum powder and paste products. It serves the automotive; electrical machinery, electronics, and telecommunications; environment, safety, and energy; public facilities, landscaping, and architecture; transportation; and food and health, and industrial products markets. The company was incorporated in 2012 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nippon Light Metal Holdings generates revenue primarily through the sale of aluminum products across several key sectors. Its revenue model is anchored in the manufacturing and distribution of aluminum materials, which are sold to industries such as automotive and construction, where demand for lightweight and durable materials is increasing. The company has established significant partnerships with major automotive manufacturers and construction firms, enabling consistent orders and long-term contracts that provide stable cash flow. Additionally, the company benefits from value-added services, including custom fabrication and recycling operations, which enhance profit margins. The global trend towards sustainability and lightweight materials further supports its revenue growth, as more industries seek to reduce weight and improve fuel efficiency in their products.

Nippon Light Metal Holdings Co Financial Statement Overview

Summary

Financial statements indicate solid profitability and revenue growth (income statement strength), supported by a stable balance sheet with moderate leverage. However, declining free cash flow due to higher capital expenditures and the need to improve operating efficiency temper the overall financial strength.

Income Statement

Nippon Light Metal Holdings Co has demonstrated consistent revenue growth with a notable improvement in net income over the past year. The gross profit margin and net profit margin are solid, reflecting efficient cost management. However, the EBIT and EBITDA margins reveal room for improvement in operational efficiency.

Balance Sheet

The company's balance sheet shows a stable equity base with a moderate debt-to-equity ratio, indicating prudent financial leverage. The equity ratio suggests a healthy proportion of shareholder equity relative to total assets. However, the company should monitor its debt levels to avoid potential risks.

Cash Flow

Cash flow analysis indicates a decrease in free cash flow due to higher capital expenditures. The operating cash flow to net income ratio is reasonable, but the declining free cash flow signals potential liquidity challenges. The company needs to enhance its cash conversion efficiency.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	558.65B	550.18B	523.72B	516.95B	486.58B	432.57B
Gross Profit	96.56B	95.26B	88.61B	76.93B	91.35B	90.07B
EBITDA	41.65B	43.12B	38.83B	32.45B	47.01B	28.46B
Net Income	12.35B	12.38B	9.94B	7.20B	16.76B	3.37B
Balance Sheet
Total Assets	529.43B	544.31B	543.19B	526.20B	532.60B	506.95B
Cash, Cash Equivalents and Short-Term Investments	30.92B	34.71B	35.21B	31.30B	45.19B	61.23B
Total Debt	165.29B	168.83B	161.32B	163.57B	155.41B	146.23B
Total Liabilities	280.98B	293.83B	305.10B	305.44B	311.69B	299.85B
Stockholders Equity	231.34B	233.13B	221.26B	205.47B	203.09B	190.71B
Cash Flow
Free Cash Flow	0.00	-7.98B	14.11B	-17.71B	-19.36B	15.26B
Operating Cash Flow	0.00	12.06B	38.04B	695.00M	1.49B	41.94B
Investing Cash Flow	0.00	-19.11B	-23.93B	-15.12B	-18.02B	-25.67B
Financing Cash Flow	0.00	6.24B	-11.05B	85.00M	-626.00M	8.19B

Nippon Light Metal Holdings Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2561.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5703, the sentiment is Positive. The current price of 2561 is below the 20-day moving average (MA) of 3010.80, below the 50-day MA of 2810.72, and above the 200-day MA of 2169.74, indicating a bullish trend. The MACD of 80.45 indicates Positive momentum. The RSI at 55.46 is Neutral, neither overbought nor oversold. The STOCH value of 71.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5703.

Nippon Light Metal Holdings Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5727	77 Outperform	¥193.09B	17.88	5.78%	1.49%	0.82%	-1.72%
5703	72 Outperform	¥175.73B	6.54	5.71%	3.02%	6.23%	11.86%
5726	71 Outperform	¥120.52B	19.55	―	1.38%	-3.56%	-30.17%
3036	68 Neutral	¥94.68B	7.97	―	2.98%	8.89%	102.20%
5741	66 Neutral	¥487.84B	5.47	6.36%	1.91%	11.31%	-25.76%
5702	59 Neutral	¥53.91B	13.94	0.07%	4.88%	16.98%	-96.24%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%

Nippon Light Metal Holdings Co Corporate Events

Nippon Light Metal Announces CEO Succession and New Chairman

Nippon Light Metal Holdings has announced a leadership reshuffle, with current President and CEO Ichiro Okamoto slated to become Chairman and CEO and Director Shuichi Asakuno set to assume the role of President and CEO. The change, approved in a January 30, 2026 board meeting and scheduled to take effect on April 1, 2026, is part of a broader management structure reorganization that aims to realign the company’s top leadership responsibilities, potentially sharpening strategic oversight at the chairman level while bringing new executive direction to day-to-day management.

The most recent analyst rating on (JP:5703) stock is a Hold with a Yen3047.00 price target. To see the full list of analyst forecasts on Nippon Light Metal Holdings Co stock, see the JP:5703 Stock Forecast page.

Nippon Light Metal Holdings Delivers Strong Nine-Month Earnings and Confirms Higher Dividend Plan

Nippon Light Metal Holdings reported solid results for the nine months ended December 31, 2025, with net sales rising 5.7% year on year to ¥427.1 billion and operating profit increasing 20.2% to ¥18.6 billion. Ordinary profit climbed 13.8% to ¥16.9 billion, while profit attributable to owners of the parent grew 20.8% to ¥11.5 billion, lifting basic earnings per share to ¥186.49. The company’s financial position also strengthened, with total assets increasing to ¥569.5 billion and shareholders’ equity up to ¥242.1 billion, though the equity ratio edged slightly lower to 42.5%. For fiscal 2025 (ending March 31, 2026), the company is maintaining its full-year forecast of ¥590.0 billion in net sales and ¥15.0 billion in profit attributable to owners of the parent, and continues to plan a higher annual dividend of ¥80 per share, up from ¥70 in the prior year, signaling confidence in earnings resilience and a commitment to enhanced shareholder returns.

The most recent analyst rating on (JP:5703) stock is a Buy with a Yen3187.00 price target. To see the full list of analyst forecasts on Nippon Light Metal Holdings Co stock, see the JP:5703 Stock Forecast page.