LIXIL Group (5938) AI Stock Analysis

• Market Cap: ¥499.76B
• Dividend Yield: 4.8%
• Average Volume (3M): 1.22M
• Price to Earnings (P/E): 16.1
• Beta (1Y): 0.55
• Revenue Growth: 0.68%
• EPS Growth: N/A
• Country: JP
• Employees: 49,310
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): -3.17
• Shares Outstanding: 287,514,950
• 10 Day Avg. Volume: 1,024,740
• 30 Day Avg. Volume: 1,224,953
• PEG Ratio: -2.17
• Price to Book (P/B): 0.80
• Price to Sales (P/S): 0.33
• P/FCF Ratio: 9.04
• 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: ¥1,979.93
• Price Target Upside: 13.89% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 42.02
• Revenue Forecast (FY): ¥1.53T

• Rating: 50 Neutral
• Price Target: ¥1,773.00 ▲(1.98% Upside)
• Action: Reiterated Date: 02/01/26
• Date: Action: Reiterated 02/01/26

The score is held back primarily by weak profitability and returns alongside meaningful leverage, despite improving revenue and gross margin and positive TTM free cash flow. Technical indicators also skew bearish with the stock trading below key moving averages and a negative MACD, while valuation is mixed—an attractive dividend yield offset by a high P/E.

Positive Factors

Diverse global brands and product portfolio

A broad portfolio across sanitaryware, faucets, windows/doors and exterior products under well-known global brands supports structural resilience. Diversification across product lines and regions helps stabilize revenue versus single-market cyclicality and enables cross-selling to trade and retail channels.

Sustained revenue growth and improving gross margin

Consistent top-line growth with a step-up in gross margin indicates improving underlying demand mix and operational leverage. Over a 2–6 month horizon this suggests durable revenue momentum and better cost absorption, which can support higher operating profitability if sustained.

Positive operating and free cash flow

Material positive operating and free cash flow enhances financial flexibility for capex, dividends, or debt reduction. Persistent FCF generation is a durable advantage for capital allocation and reduces reliance on external funding in a cyclical construction-related business.

Negative Factors

Thin profitability and low operating returns

Very low margins and limited operating profitability constrain the firm’s ability to convert sales into sustainable earnings. This weak profit conversion reduces retained earnings for reinvestment, limits buffer against downturns, and makes long-term return targets challenging without structural margin improvement.

Meaningful leverage limits balance-sheet flexibility

Above-average debt-to-equity for a construction-related business reduces scope to absorb cyclical shocks or fund growth opportunistically. Higher leverage increases interest expense sensitivity and constrains strategic moves (M&A, capex) absent stronger cash generation or deleveraging over time.

Volatile earnings and uneven cash-flow quality

Large swings in free cash flow growth and a disconnect where FCF materially exceeds weak net income point to earnings quality and working-capital volatility. Such instability complicates forecasting, raises execution risk for strategic plans, and can undermine investor confidence in sustainable profitability.

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 & Services Business (H&S) segments. The LWT segment offers sanitary ware, shower toilets, water faucets, washstands, bathtubs, prefabricated bathrooms, smart products, showerheads, washstand fixtures, washstand cabinet units, kitchen systems, etc.; and tiles for houses and buildings, and internal decorative tiles, etc. This segment offers its products under the INAX, GROHE, American Standard, COBRA, DXV, Jaxson, RICHELLE, and SPAGE brands. The LHT segment provides housing window sashes, entrance doors, various types of shutters, gates, carports, banisters, high railings, etc.; window frames, wooden furnishing materials, interior decorative materials, etc.; sidings, roofing materials, etc.; and solar power systems, etc. This segment offers its products under the Tostem, Exsior, Interio, Super Wall, Nodea, and Asahi Tostem brands. The LBT segment offers curtain walls, building window sashes, store facades, etc. The H&S segment engages in the development of homebuilding franchise chains, construction on order, etc.; and provides services for land, buildings, real estate management, real estate franchises development support, etc., as well as housing loans. This segment offers its products under the Lixil, Eyeful Home, Face Home, ERA, and GL HOME brands. The company was formerly known as LIXIL Group Corporation and changed its name to LIXIL Corporation in December 2020. LIXIL Corporation was founded in 1875 and is headquartered in Tokyo, Japan.

How the Company Makes Money

LIXIL Group generates revenue through multiple key streams, including the sale of its core products such as toilets, faucets, showers, and kitchen systems, which are distributed globally. The company operates through various brands that cater to different market segments, enhancing its ability to reach diverse customer bases. Additionally, LIXIL engages in strategic partnerships and collaborations with builders, architects, and real estate developers, which further expands its market reach and boosts sales. The company also benefits from its focus on innovation, introducing new technologies and sustainable products that meet evolving consumer demands and regulatory standards. Furthermore, LIXIL's presence in emerging markets contributes to its revenue growth, as urbanization and rising living standards increase the demand for quality housing and sanitary solutions.

LIXIL Group Financial Statement Overview

Summary

Mixed fundamentals: solid TTM revenue growth (+12.5%) and improved gross margin (~34.1%), but profitability is very thin (TTM net margin ~0.6%, EBIT margin ~2.3%) with volatility across years. Leverage is meaningful (debt-to-equity ~1.09) and ROE is low (~1.5%), though TTM free cash flow is positive (~¥56.0B) after weaker prior periods.

Income Statement

TTM (Trailing-Twelve-Months) revenue growth is solid (+12.5%), and gross margin improved versus prior annual periods (TTM ~34.1% vs 2024 ~31.9%). However, profitability remains thin: TTM net margin is ~0.6% and EBIT margin ~2.3%, reflecting limited earnings power. Results also look volatile across years (loss in 2024, very small profit in 2025 annual), which tempers confidence in the durability of the recovery.

Balance Sheet

Leverage is meaningful with debt-to-equity around ~1.09 in TTM (and ~1.05–1.06 in recent annual periods), limiting balance-sheet flexibility for a cyclical construction-related business. Equity is sizable (TTM ~¥668B), but returns are low (TTM return on equity ~1.5%), indicating that the capital base is not currently generating strong profitability. Overall, the balance sheet looks serviceable but not especially conservative.

Cash Flow

Cash generation is a relative bright spot: TTM operating cash flow is ~¥87.5B and free cash flow is positive (~¥56.0B), following weaker/negative free cash flow in 2023–2024. That said, free cash flow growth is sharply negative in TTM (about -311%), suggesting volatility, and free cash flow is meaningfully larger than net income in TTM (net income is very low), which signals earnings quality is mixed and results are sensitive to swings in profitability and working capital.

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	498.11B	472.71B	468.63B	486.87B	469.22B
EBITDA	117.14B	117.20B	101.19B	107.17B	152.43B	136.75B
Net Income	9.53B	2.00B	-13.91B	15.99B	48.60B	33.05B
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	130.70B	137.51B	106.68B	100.40B	111.06B
Total Debt	730.30B	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	54.83B	-7.08B	-40.34B	69.66B	82.55B
Operating Cash Flow	87.52B	100.00B	45.79B	15.01B	118.30B	151.04B
Investing Cash Flow	-26.94B	-28.13B	-29.88B	-29.32B	-24.80B	-54.15B
Financing Cash Flow	-76.13B	-72.47B	-3.67B	19.84B	-108.09B	-93.42B

LIXIL Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1738.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 1738.5 is below the 20-day moving average (MA) of 1812.38, below the 50-day MA of 1850.41, and below the 200-day MA of 1785.50, indicating a bearish trend. The MACD of -33.38 indicates Positive momentum. The RSI at 35.82 is Neutral, neither overbought nor oversold. The STOCH value of 21.33 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5332	67 Neutral	$908.10B	9.02	0.85%	2.36%	-0.03%	-89.02%
5943	67 Neutral	¥102.83B	27.14	2.57%	3.57%	2.69%	1.74%
7943	66 Neutral	¥111.46B	13.03	―	3.53%	-0.58%	-46.15%
6367	66 Neutral	¥5.63T	42.68	9.46%	1.52%	1.60%	5.80%
5930	66 Neutral	¥132.80B	10.42	12.89%	3.40%	2.98%	41.11%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5938	50 Neutral	¥499.76B	16.11	1.44%	4.80%	0.68%	―

LIXIL Group Corporate Events

LIXIL Lifts Q3 Earnings on Renovation Demand and Subsidy-Backed Products Despite Weak Housing Markets

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 housing demand and delivering year-on-year growth in revenue and core earnings. The LHT business maintained revenue and core earnings at prior-year levels thanks to strong sales of subsidy-eligible products despite weak new housing demand, while the international LWT business significantly improved core earnings amid lower revenue, driven by robust performance in Europe, the Middle East, and India, though housing markets in the Americas and China remained soft; higher financial costs from exchange losses and lower tax expenses at a German subsidiary also shaped the quarter’s overall profitability profile.

The most recent analyst rating on (JP:5938) stock is a Hold with a Yen2000.00 price target. To see the full list of analyst forecasts on LIXIL Group stock, see the JP:5938 Stock Forecast page.

LIXIL Lifts Earnings on Flat Sales, Keeps Dividend and Full-Year Outlook Intact

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 profitability from continuing operations. Profit attributable to owners of the parent from continuing operations rose 7.2% to ¥12.4 billion, while total comprehensive income surged, supporting a higher equity base and an equity ratio of 34.4%. The company maintained its dividend forecast at an annual total of ¥90 per share and left its full-year guidance unchanged, targeting modest revenue growth and a sharp rebound in profit for the year, including a significant improvement in results from discontinued operations. These figures signal progress in margin improvement and cost control despite top-line stagnation, underpinning stable shareholder returns and suggesting a gradual strengthening of LIXIL’s financial position in a challenging market environment.

The most recent analyst rating on (JP:5938) stock is a Hold with a Yen2000.00 price target. To see the full list of analyst forecasts on LIXIL Group stock, see the JP:5938 Stock Forecast page.

LIXIL Reshapes Top Management, Appoints Yugo Kanazawa as Co-Representative Executive Officer and COO

LIXIL Corporation announced that its Board of Directors has approved a change in its top management structure, appointing Executive Officer and Executive Vice President Yugo Kanazawa as Representative Executive Officer, Executive Vice President, and COO effective April 1, 2026, alongside current President and CEO Kinya Seto, who remains a Representative Executive Officer. The move is part of a planned leadership transition aimed at strengthening strategic execution for LIXIL’s ongoing transformation, highlighting the increasing importance of Kanazawa’s digital, marketing, and customer experience expertise to the company’s next phase of growth and operational efficiency, and signaling a stronger dual-leadership framework expected to support its competitiveness and stakeholder value.

The most recent analyst rating on (JP:5938) stock is a Hold with a Yen1983.00 price target. To see the full list of analyst forecasts on LIXIL Group stock, see the JP:5938 Stock Forecast page.