Sumitomo Electric Industries (5802) AI Stock Analysis

• Market Cap: ¥8.09T
• Dividend Yield: 1.38%
• Average Volume (3M): 3.20M
• Price to Earnings (P/E): 31.4
• Beta (1Y): 1.50
• Revenue Growth: 4.96%
• EPS Growth: 8.64%
• Country: JP
• Employees: 293,266
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 101.65
• Shares Outstanding: 793,940,550
• 10 Day Avg. Volume: 3,506,780
• 30 Day Avg. Volume: 3,202,623
• PEG Ratio: 0.34
• Price to Book (P/B): 0.84
• Price to Sales (P/S): 0.41
• P/FCF Ratio: 9.50
• 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: ¥8,811.25
• Price Target Upside: 5.31% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 381.57
• Revenue Forecast (FY): ¥4.92T

• Rating: 72 Outperform
• Price Target: ¥11,533.00 ▲(37.84% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is primarily driven by strong financial performance (solid growth, improving margins, stable leverage, and strong cash conversion). Technicals are supportive due to a clear uptrend, but overbought momentum signals increase near-term risk. Valuation is the main drag, with a high P/E and modest dividend yield.

Positive Factors

Diversified end-markets

Sumitomo’s exposure to automotive, telecom, power and industrial materials reduces revenue cyclicality and aligns with secular trends (EV electrification, fiber buildouts, grid investment). Long-term supply contracts and manufacturing scale support steady orders and reinvestment capacity.

Consistent revenue growth and improving margins

Sustained top-line growth paired with margin expansion signals durable operational improvement and pricing or mix advantages. Stable gross and EBIT margins support cash generation and capacity to fund R&D, capex and program investments across multi-year automotive and infrastructure cycles.

Strong cash conversion and conservative leverage

High operating cash conversion and positive free cash flow, combined with modest leverage and a >50% equity ratio, provide financial flexibility. This balance sheet strength enables funding of capital programs, supports multi-year vehicle model ramps and cushions cyclical downturns.

Negative Factors

Free cash flow decline

A 5.5% FCF decline, even from a positive base, reduces incremental capacity for capex or discretionary payouts if persistent. In capital-intensive manufacturing, sustained FCF weakness can limit investments in productivity, new product development and program support over the medium term.

Modest return on equity

An ROE around 8.5% is modest given the company’s scale and capital base. This suggests limited efficiency in converting equity into profit and could constrain long-term shareholder returns unless margins expand or asset turns improve through higher-value products or operational restructuring.

Relatively thin net margins

Net margin near 4% provides a limited buffer against raw material, labor or FX shocks common in global manufacturing. Low net margins make earnings and cash flow more sensitive to cost inflation or volume declines, raising structural earnings volatility risk.

Sumitomo Electric Industries Business Overview & Revenue Model

Company Description

Sumitomo Electric Industries, Ltd. manufactures and sells electric wires and cables worldwide. It operates through Automotive, Infocommunications, Electronics, Environment and Energy, and Industrial Materials and Others segments. The company offers wiring harnesses and electrical components; steel cords for tire reinforcement; steel wires for springs; wiring materials; optical lenses for infrared devices; abrasion-resistant parts/materials; heat shrink and heat-resistant tubing/tapes; magnet and aluminum bars/wires; spinel products; products for electronic devices; sintered parts; and EV quick-charger connector assemblies. It also provides fiber optics products; fusion splicer and accessories; data center solutions; intelligent transport systems; remote monitoring systems; NanoPlug series; CATV systems; set top boxes; optical transceiver modules, and optical and wireless devices; optical lenses for infrared devices; AirMT, non-contact multi-fiber interconnects; and low profile fiber-array for silicon photonics. In addition, the company offers electronic wires; flexible printed circuits; heat-shrinkable tubings; cladded/plated and electroplated wires; thermoplastic molded components; PTFE membranes; spiral shielded and electronic wires; cross linked fluorine resins; coaxial cables; flat components; thunderbolt cables; plated and alloy wires; abrasion-resistant parts/materials; and RGB laser modules. Further, it provides various energy and environment systems; products for railway and transport machinery; steel wires for springs; abrasion-resistant parts/materials; magnet wires; diamond/CBN grinding wheels; PC steel wires and high-strength shear reinforcement; drills/endmills; CBN/PCD; milling and turning tools; laser optics; and magnesium alloy parts. The company was formerly known as Sumitomo Electric Wire & Cable Works and changed its name to Sumitomo Electric Industries, Ltd. in 1939. The company was founded in 1897 and is headquartered in Osaka, Japan.

How the Company Makes Money

Sumitomo Electric Industries generates revenue through the sale of its diverse product range across several key sectors. The company's primary revenue streams include the production and distribution of electrical wires and cables, automotive components, and telecommunications equipment. The company has established significant partnerships with major automotive manufacturers and telecommunications firms, which help drive consistent demand for its products. Additionally, Sumitomo Electric invests in research and development to enhance its product offerings and maintain a competitive edge, while also capitalizing on emerging markets and technologies, such as renewable energy and smart infrastructure, to further bolster its revenue generation.

Sumitomo Electric Industries Financial Statement Overview

Summary

Strong fundamentals supported by a high income statement score (85) on consistent revenue growth and improving profitability. Balance sheet is stable (75) with manageable leverage (debt-to-equity 0.30) and solid equity ratio (51.6%). Cash flow is healthy (78) with strong cash conversion (operating cash flow to net income 2.08), though free cash flow dipped slightly year over year (-5.5%).

Income Statement

Sumitomo Electric Industries has shown strong revenue growth, increasing consistently over the past few years, with a notable rise of 6.3% from 2024 to 2025. The company also maintains healthy margins with a gross profit margin of 18.8% and an EBIT margin of 6.8% in 2025. The net profit margin has improved to 4.1%, indicating strong profitability. The EBITDA margin of 11.5% signifies solid operating efficiency. Overall, the income statement reflects robust financial health and strong growth trends.

Balance Sheet

The balance sheet of Sumitomo Electric Industries is stable, with a debt-to-equity ratio of 0.30, showcasing a manageable level of leverage. The return on equity (ROE) has improved to 8.5%, indicating effective use of shareholder equity to generate profits. The equity ratio stands at 51.6%, reflecting a strong capital structure and financial stability. Despite manageable debt levels, a focus on further reducing liabilities could enhance financial resilience.

Cash Flow

The company demonstrates strong cash flow management, with a significant free cash flow growth of -5.5% from 2024 to 2025, indicating a slight decline but still maintaining positive free cash flow. The operating cash flow to net income ratio of 2.08 suggests efficient cash generation relative to reported earnings. The free cash flow to net income ratio is 1.05, reinforcing strong cash flow conversion. Overall, the cash flow statement indicates a robust financial position with a focus on sustaining operational efficiency.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	4.71T	4.68T	4.40T	4.01T	3.37T	2.92T
Gross Profit	896.27B	880.13B	767.59B	669.98B	573.94B	531.34B
EBITDA	540.56B	540.65B	474.20B	408.64B	346.83B	284.93B
Net Income	197.13B	193.77B	149.72B	112.65B	96.31B	56.34B
Balance Sheet
Total Assets	4.48T	4.44T	4.37T	4.01T	3.81T	3.38T
Cash, Cash Equivalents and Short-Term Investments	314.04B	295.90B	269.74B	283.43B	259.58B	254.40B
Total Debt	729.36B	775.87B	801.50B	960.37B	859.79B	685.09B
Total Liabilities	1.97T	1.91T	1.93T	1.90T	1.75T	1.49T
Stockholders Equity	2.28T	2.29T	2.21T	1.90T	1.77T	1.63T
Cash Flow
Free Cash Flow	0.00	202.43B	214.14B	80.72B	-98.06B	2.83B
Operating Cash Flow	0.00	402.25B	393.46B	265.19B	76.00B	169.66B
Investing Cash Flow	0.00	-223.90B	-123.81B	-147.82B	-165.45B	-163.43B
Financing Cash Flow	0.00	-150.82B	-292.31B	-98.29B	82.82B	-13.10B

Sumitomo Electric Industries Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8367.00
• 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:5802, the sentiment is Positive. The current price of 8367 is below the 20-day moving average (MA) of 8854.55, above the 50-day MA of 7480.24, and above the 200-day MA of 5037.12, indicating a bullish trend. The MACD of 879.47 indicates Negative momentum. The RSI at 75.72 is Negative, neither overbought nor oversold. The STOCH value of 81.50 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5802.

Sumitomo Electric Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7259	77 Outperform	¥2.09T	12.58	8.34%	2.03%	4.33%	524.86%
7276	76 Outperform	¥796.07B	19.73	7.20%	2.41%	-0.73%	88.36%
7282	75 Outperform	¥595.80B	13.50	8.26%	2.62%	1.44%	-0.92%
5802	72 Outperform	¥8.09T	31.45	8.97%	1.38%	4.96%	8.64%
6902	67 Neutral	¥6.19T	16.31	6.98%	2.98%	2.41%	11.03%
5334	67 Neutral	¥1.57T	15.41	13.69%	2.65%	6.53%	11.14%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Sumitomo Electric Industries Corporate Events

Sumitomo Electric Lifts Full-Year Forecast on Strong Demand and Gain from Sumitomo Densetsu Exit

Sumitomo Electric Industries has raised its full-year consolidated earnings forecast for the fiscal year ending March 31, 2026, after results for the nine months to December 31, 2025 exceeded earlier projections on the back of sustained demand in its infocommunications and automotive businesses, as well as cost-cutting and improved selling prices. The company now expects higher net sales, operating profit and profit attributable to owners of the parent, with profit boosted by about ¥70 billion in extraordinary income from the transfer of all its shares in consolidated subsidiary Sumitomo Densetsu to Daiwa House Industry via a completed tender offer and subsequent share buyback; while the year-end dividend forecast is unchanged for now and will be based only on ordinary business profits, the proceeds from the Densetsu share sale are earmarked to finance a tender offer to make Sumitomo Riko a wholly owned subsidiary, signaling a strategic portfolio reshaping that could alter the group’s earnings profile and capital allocation priorities.

The most recent analyst rating on (JP:5802) stock is a Buy with a Yen7074.00 price target. To see the full list of analyst forecasts on Sumitomo Electric Industries stock, see the JP:5802 Stock Forecast page.

Sumitomo Electric Lifts Profit Outlook and Dividends on Strong Nine-Month Results

Sumitomo Electric Industries reported solid growth for the nine months ended December 31, 2025, with net sales rising 7.1% year on year to ¥3,686.9 billion and operating profit climbing 31.0% to ¥271.0 billion. Ordinary profit increased 39.7% to ¥276.5 billion, while profit attributable to owners of the parent surged 55.9% to ¥177.2 billion, lifting basic earnings per share to ¥227.22. The company’s financial position also strengthened, with total assets reaching ¥4,844.5 billion and net assets ¥2,659.2 billion, maintaining an equity-to-asset ratio above 50%. Reflecting improved earnings, the company has already raised its interim dividend to ¥50.00 per share for the fiscal year ending March 31, 2026 and is forecasting a full-year dividend of ¥118.00 per share, up from ¥97.00 in the previous fiscal year. Sumitomo Electric revised its full-year outlook, now expecting net sales of ¥4,900.0 billion and a 16.9% increase in operating profit to ¥375.0 billion, with profit attributable to owners of the parent projected to jump 65.1% to ¥320.0 billion, underscoring stronger profitability and potentially enhanced returns for shareholders.

The most recent analyst rating on (JP:5802) stock is a Buy with a Yen7074.00 price target. To see the full list of analyst forecasts on Sumitomo Electric Industries stock, see the JP:5802 Stock Forecast page.