LIXIL Group (5938) AI Stock Analysis

• Market Cap: ¥538.71B
• Dividend Yield: 4.8%
• Average Volume (3M): 1.22M
• Price to Earnings (P/E): 58.0
• Beta (1Y): 0.49
• 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: ¥1,960.26
• Price Target Upside: 4.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: ¥1,983.00 ▲(5.82% Upside)

LIXIL Group's stock score is primarily driven by its technical strength, with positive market momentum and price trends. However, the high P/E ratio indicates overvaluation, and financial performance concerns, particularly in profitability and cash flow, weigh on the overall score.

Positive Factors

Revenue Growth

The positive revenue growth indicates LIXIL's ability to recover and expand its market presence, driven by demand for its diverse product offerings.

Market Position

LIXIL's strong market position as a global leader in building materials provides a competitive edge, ensuring sustained demand and brand recognition.

Sustainability and Innovation

LIXIL's focus on sustainability and innovation aligns with global trends, enhancing its appeal to environmentally conscious consumers and supporting long-term growth.

Negative Factors

Profitability Challenges

Low profitability margins suggest difficulty in cost management and operational efficiency, which could hinder long-term financial performance.

Cash Flow Generation

Declining free cash flow growth indicates potential issues in liquidity management, affecting the company's ability to invest in growth opportunities.

Return on Equity

Low ROE suggests inefficient use of equity capital, which may deter investors seeking higher returns and impact the company's attractiveness.

LIXIL Group Business Overview & Revenue Model

Company Description

LIXIL Group Corporation (5938) is a leading global manufacturer of building materials and housing equipment based in Japan. The company operates in several sectors, primarily focusing on housing and bathroom products, kitchen systems, and building materials. LIXIL's core offerings include high-quality sanitary ware, water technology products, and innovative housing solutions, catering to both residential and commercial markets. The company is recognized for its commitment to sustainability and innovation, positioning itself as a key player in the construction and home improvement industries.

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

LIXIL Group's financial performance is mixed. The income statement shows a significant revenue decline and low profitability, with a net profit margin of only 0.13%. The balance sheet indicates moderate leverage, which could pose risks if not managed properly. Cash flow generation is improving, but the conversion of earnings to cash flow needs attention.

Income Statement

LIXIL Group's income statement shows mixed results. The TTM data indicates a significant revenue decline of 34.1%, which is concerning. However, the company maintains a stable gross profit margin of around 33%. The net profit margin is extremely low at 0.13%, indicating minimal profitability. EBIT and EBITDA margins are also relatively low, suggesting limited operational efficiency.

Balance Sheet

The balance sheet reflects a moderate financial position. The debt-to-equity ratio is slightly above 1, indicating a balanced but leveraged capital structure. Return on equity is very low at 0.32%, showing limited returns for shareholders. The equity ratio is not provided, but the overall leverage suggests potential risks if not managed carefully.

Cash Flow

Cash flow analysis reveals some positive trends. The free cash flow has grown significantly in the TTM period, and the operating cash flow to net income ratio is healthy at 0.17. However, the free cash flow to net income ratio is 0.66, indicating that not all earnings are translating into free cash flow, which could be a concern for liquidity.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.50T	1.50T	1.48T	1.50T	1.43T	1.38T
Gross Profit	508.82B	498.11B	472.71B	468.63B	486.87B	469.22B
EBITDA	115.48B	117.20B	101.19B	107.17B	152.43B	136.75B
Net Income	9.29B	2.00B	-13.91B	15.99B	48.60B	33.05B
Balance Sheet
Total Assets	1.87T	1.83T	1.89T	1.85T	1.78T	1.74T
Cash, Cash Equivalents and Short-Term Investments	126.38B	130.70B	137.51B	106.68B	100.40B	111.06B
Total Debt	668.26B	657.80B	677.19B	618.40B	524.70B	595.50B
Total Liabilities	1.23T	1.21T	1.24T	1.23T	1.17T	1.19T
Stockholders Equity	636.57B	617.89B	642.51B	625.43B	612.38B	552.27B
Cash Flow
Free Cash Flow	57.82B	54.83B	-7.08B	-40.34B	69.66B	82.55B
Operating Cash Flow	89.61B	100.00B	45.79B	15.01B	118.30B	151.04B
Investing Cash Flow	-28.11B	-28.13B	-29.88B	-29.32B	-24.80B	-54.15B
Financing Cash Flow	-51.10B	-72.47B	-3.67B	19.84B	-108.09B	-93.42B

LIXIL Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1874.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5938, the sentiment is Positive. The current price of 1874 is above the 20-day moving average (MA) of 1850.28, above the 50-day MA of 1802.21, and above the 200-day MA of 1728.12, indicating a bullish trend. The MACD of 22.17 indicates Negative momentum. The RSI at 65.01 is Neutral, 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:5938.

LIXIL Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5929	68 Neutral	¥868.43B	14.70	18.61%	2.94%	2.90%	36.64%
7943	66 Neutral	¥109.09B	32.62	―	3.53%	-0.58%	-46.15%
5930	66 Neutral	¥136.30B	10.53	12.89%	3.40%	2.98%	41.11%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5938	62 Neutral	¥538.71B	57.98	1.44%	4.80%	0.68%	―
5332	62 Neutral	¥673.72B	174.79	0.83%	2.36%	-0.03%	-89.02%
5932	52 Neutral	¥19.47B	-6.36	―	4.03%	1.03%	-92.80%

LIXIL Group Corporate Events

LIXIL Corporation Reports Mixed H1 Financial Results Amid Market Changes

LIXIL Corporation reported a decrease in revenue for the first half of the fiscal year ending March 31, 2026, despite an increase in core earnings and EBITDA. The company experienced slowed sales growth in Q2 due to changes in Japan’s Building Standards Act, but renovation sales remained solid. The international business saw improved profits despite lower revenue, with strong performance in Europe, the Middle East, and India, while the Americas and China faced sluggish housing markets. Tax expenses decreased due to a favorable corporate tax rate change in LIXIL Europe, and the full-year earnings and dividend forecasts remain unchanged.

LIXIL Corporation Reports Stable Financial Performance Amid Revenue Dip

LIXIL Corporation has reported its consolidated financial results for the first half of the fiscal year ending March 2026, showing a slight decrease in revenue but a significant increase in core earnings and operating profit. The company maintains its dividend forecast and has not revised its performance forecast, indicating stability in its financial strategy despite the slight revenue dip.

LIXIL Europe Sees Tax Expense Reduction Amid German Tax Reforms

LIXIL Corporation announced a significant decrease in corporate income tax expenses for its subsidiary, LIXIL Europe, due to the recalculation of future tax liabilities following Germany’s Corporate Growth Opportunities Act. This adjustment, expected to reduce tax expenses by approximately JPY12.0 billion, will not impact LIXIL Europe’s operations or cash flow, but it will be reflected in the company’s financial performance over the fiscal year ending March 2026. Despite this tax adjustment, LIXIL maintains its annual dividend forecast, indicating stable financial expectations.

LIXIL Secures Loan Agreement with Financial Covenants

LIXIL Corporation has announced the conclusion of a loan agreement with financial covenants to fund business capital and refinance existing borrowings. The agreement involves a syndicated term loan with city and regional banks, totaling JPY77 billion, with maturity dates ranging from 2029 to 2032. The financial covenants require maintaining a certain equity level and avoiding consecutive business losses, with the overall impact on LIXIL’s financial performance expected to be non-material.