LIXIL Group Corp. (JP:5938)
:5938
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LIXIL Group
(5938)
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Rating:52Neutral
Price Target:
¥1,705.00
▲(4.00% Upside)
Action:ReiteratedDate:03/26/26
The score is held to the low-50s by very thin profitability and meaningful leverage despite improving revenue and positive free cash flow. Technical indicators are notably weak (below key moving averages with negative MACD), while valuation is somewhat supported by the high dividend yield. Earnings-call commentary was balanced but cautious, with commodity/FX and U.S. losses creating near-term uncertainty and a one-time tax benefit making comparisons harder next year.
Positive Factors
Positive free cash flow and cash generation
Sustained positive operating and free cash flow provides durable funding to service debt, invest in renovation and product programs, and maintain dividends. Over a 2–6 month horizon this cash generation cushions cyclical construction volatility and supports strategic repairs.
Negative Factors
Very thin profitability margins
Extremely low net and EBIT margins limit the firm's ability to absorb cost shocks, invest for growth, or rapidly improve returns. Even with revenue gains, thin profitability means modest operational improvements are required to generate meaningful increases in shareholder returns over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Positive free cash flow and cash generation
Sustained positive operating and free cash flow provides durable funding to service debt, invest in renovation and product programs, and maintain dividends. Over a 2–6 month horizon this cash generation cushions cyclical construction volatility and supports strategic repairs.
Read all positive factors
LIXIL Group (5938) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥481.94B
Dividend Yield4.8%
Average Volume (3M)1.22M
Price to Earnings (P/E)16.1
Beta (1Y)0.59
Revenue Growth0.68%
EPS GrowthN/A
CountryJP
Employees49,310
SectorIndustrials
Sector Strength72
IndustryConstruction
Share Statistics
EPS (TTM)29.41
Shares Outstanding287,514,950
10 Day Avg. Volume1,024,740
30 Day Avg. Volume1,224,953
Financial Highlights & Ratios
PEG Ratio-2.17
Price to Book (P/B)0.80
Price to Sales (P/S)0.33
P/FCF Ratio7.56
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥1,806.15Price Target Upside10.16% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)68.08
Revenue Forecast (FY)¥1.54T
LIXIL Group Business Overview & Revenue Model
Company Description
LIXIL Corporation, through its subsidiaries, manufactures and sells building materials and housing equipment worldwide. It operates through LIXIL Water Technology (LWT), LIXIL Housing Technology (LHT), LIXIL Building Technology (LBT), and Housing ...
How the Company Makes Money
LIXIL primarily makes money by selling building products and housing equipment to professional customers (builders, contractors, plumbers, developers, distributors) and, in some cases, to consumers through retail channels. Key revenue streams incl...
LIXIL Group Earnings Call Summary
Earnings Call Date:Jan 30, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Neutral
Mixed but balanced. The company delivered stronger cash‑earnings measures (EBITDA JPY 98.4bn, core earnings JPY 36.5bn), improved gross margin and maintained positive free cash flow, with renovation demand and EMEA/IMEA strength offsetting weakness in the U.S. and China. However, rising raw‑material costs, foreign‑exchange losses, heavy depreciation/tax inefficiencies, ongoing U.S. losses and project timing uncertainty create meaningful near‑term risks and cloud FY2027 visibility. Management has a clear plan to optimize assets and taxes, but benefits are multi‑year.Positive Updates
Key Financials — Revenue, Core Earnings and EBITDA
Revenue of JPY 1,138.5 billion for Q3; core earnings JPY 36.5 billion; EBITDA JPY 98.4 billion.
Negative Updates
Slight Revenue Decline and Operating Cash Flow Pressure
Revenue decreased slightly year‑on‑year; operating cash flow fell YoY driven by higher accounts receivable and inventories, though free cash flow stayed positive.
Read all updates
Q3-2026 Updates
Positive
Negative
Key Financials — Revenue, Core Earnings and EBITDA
Revenue of JPY 1,138.5 billion for Q3; core earnings JPY 36.5 billion; EBITDA JPY 98.4 billion.
Read all positive updates
Company Guidance
In the Q3 FY2026 briefing LIXIL reported revenue of JPY 1,138.5 billion, core earnings of JPY 36.5 billion and EBITDA of JPY 98.4 billion, with gross profit up 1.3 percentage points YoY and a 0.5 ppt improvement in the core earnings ratio; equity ratio was 34.4%, operating cash flow fell YoY (due to higher receivables and inventory) but free cash flow remained positive, and a one‑time JPY 12 billion tax benefit lifted net profit this year. Management cautioned that rapidly rising commodity prices (notably aluminum and copper, with aluminum scrap usage ~80% and trials at 90%), FX losses and higher financial costs create uncertainty into Q4 and FY2027, cited Japan new housing starts down ~13.7% Apr–Nov while renovation demand and subsidies remain supportive, and said it will pursue asset rationalization, reduce depreciation burden from past M&A and optimize tax structure over 1–2 years to narrow the gap between EBITDA and core earnings (a prior FY2027 core‑earnings reference of JPY 65 billion was noted but management did not revise near‑term guidance given ongoing uncertainty).LIXIL Group Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
48
Neutral
Cash Flow
57
Neutral
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.50T | 1.50T | 1.48T | 1.50T | 1.43T | 1.38T |
| Gross Profit | 512.26B | 453.54B | 431.07B | 427.22B | 444.89B | 427.35B |
| EBITDA | 98.67B | 114.53B | 104.38B | 107.51B | 145.42B | 141.22B |
| Net Income | 9.53B | 2.00B | -13.77B | 17.25B | 51.21B | 16.01B |
Balance Sheet | ||||||
| Total Assets | 1.94T | 1.83T | 1.89T | 1.85T | 1.78T | 1.74T |
| Cash, Cash Equivalents and Short-Term Investments | 125.06B | 123.53B | 124.48B | 106.68B | 100.40B | 111.06B |
| Total Debt | 685.25B | 657.80B | 677.19B | 618.40B | 524.70B | 595.50B |
| Total Liabilities | 1.27T | 1.21T | 1.24T | 1.23T | 1.17T | 1.19T |
| Stockholders Equity | 667.85B | 617.89B | 642.51B | 625.43B | 612.38B | 552.27B |
Cash Flow | ||||||
| Free Cash Flow | 56.02B | 65.64B | 10.12B | -26.58B | 81.27B | 96.08B |
| Operating Cash Flow | 87.52B | 100.00B | 47.99B | 15.01B | 118.30B | 151.04B |
| Investing Cash Flow | -26.94B | -28.13B | -29.88B | -29.32B | -24.80B | -54.16B |
| Financing Cash Flow | -76.13B | -72.47B | -3.67B | 19.84B | -108.09B | -93.42B |
LIXIL Group Technical Analysis
Negative
1639.50
Price Trends
1720.46
Negative
1761.16
Negative
1740.55
Negative
Market Momentum
-25.59
Negative
43.48
Neutral
35.19
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5938, the sentiment is Negative. The current price of 1639.5 is below the 20-day moving average (MA) of 1645.03, below the 50-day MA of 1720.46, and below the 200-day MA of 1740.55, indicating a bearish trend. The MACD of -25.59 indicates Negative momentum. The RSI at 43.48 is Neutral, neither overbought nor oversold. The STOCH value of 35.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5938.
LIXIL Group Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | ¥907.14B | 9.02 | 0.85% | 2.36% | -0.03% | -89.02% | |
67 Neutral | ¥106.11B | 8.48 | 2.57% | 3.57% | 2.69% | 1.74% | |
66 Neutral | ¥115.85B | 13.03 | ― | 3.53% | -0.58% | -46.15% | |
66 Neutral | ¥5.96T | 42.68 | 9.46% | 1.52% | 1.60% | 5.80% | |
66 Neutral | ¥130.79B | 10.42 | 12.89% | 3.40% | 2.98% | 41.11% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
52 Neutral | ¥481.94B | 16.11 | 1.44% | 4.80% | 0.68% | ― |
* Industrials Sector Average
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LIXIL Group Corporate Events
LIXIL Revamps Board Line-Up With New Directors and Executive Leadership Changes
Mar 23, 2026
LIXIL Corporation has announced the slate of director candidates and proposed executive officers, to take effect from April 1, 2026 and to be formally approved at the June 2026 annual shareholders’ meeting. The board will include several ind...
LIXIL Confirms Q3 FY2026 Results After CPA Review, No Changes to Figures
Feb 6, 2026
LIXIL Corporation announced that its consolidated financial results for the third quarter ended December 31, 2025, previously disclosed on January 30, 2026, have now been formally reviewed by certified public accountants, with no changes required ...
LIXIL Lifts Q3 Earnings on Renovation Demand and Subsidy-Backed Products Despite Weak Housing Markets
Jan 30, 2026
LIXIL Corporation reported core earnings of JPY36.5 billion and EBITDA of JPY98.4 billion for the third quarter of the fiscal year ending March 31, 2026, with renovation-related products in its LWTJ and Living segments offsetting sluggish new hous...
LIXIL Lifts Earnings on Flat Sales, Keeps Dividend and Full-Year Outlook Intact
Jan 30, 2026
LIXIL CORPORATION reported largely flat revenue of ¥1,138.5 billion for the first nine months of the fiscal year ending March 2026, down 0.2% year-on-year, but achieved a 17.5% increase in core earnings to ¥36.5 billion and stronger prof...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.