SMC (OR) (6273) AI Stock Analysis

• Market Cap: $3.16T
• Dividend Yield: 1.98%
• Average Volume (3M): 268.51K
• Price to Earnings (P/E): 20.6
• Beta (1Y): 1.22
• Revenue Growth: 1.96%
• EPS Growth: -11.64%
• Country: JP
• Employees: 23,144
• Sector: Industrials
• Sector Strength: 83
• Industry: Industrial - Machinery
• EPS (TTM): 564.33
• Shares Outstanding: 63,869,358
• 10 Day Avg. Volume: 209,650
• 30 Day Avg. Volume: 268,506
• PEG Ratio: -1.86
• Price to Book (P/B): 1.76
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 37.75
• 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: $66,700.42
• Price Target Upside: 30.40% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 75 Outperform
• Price Target: ¥58,987.00 ▲(15.32%Upside)

The stock achieves a strong overall score driven primarily by its solid financial performance, characterized by strong profitability and financial stability. Technical analysis and valuation are moderate, suggesting room for improvement. Earnings call and corporate events did not provide additional insights.

Positive Factors

Competitive Position in China

SMC maintains strong competitive power in China despite investor concerns about competition.

Market Valuation

The company is trading well below historical average multiples, suggesting it may be undervalued.

New Orders and Market Recovery

New orders increased by 12% YoY with strengths across regions and industries, indicating broad recovery.

Negative Factors

Capital Expenditure Strategy

The company plans to maintain an aggressive CAPEX strategy, raising it to a record high, which may affect short-term financials.

Impact of US Tariff Hike

The company has reflected the impact from US tariff hike into its forecast, estimating a reduction in sales and gross profit.

Sales Reduction Expectation

The impact from US tariff hike is estimated to reduce sales by JPY8bn and gross profit by JPY10bn in FY3/2026.

SMC (OR) Business Overview & Revenue Model

Company Description

SMC Corporation manufactures, processes, and sells automatic control equipment, sintered filters, and various types of filtration equipment worldwide. The company offers directional control valves, air cylinders, rotary actuators/air grippers, electric actuators/cylinders, vacuum equipment, air preparation equipment, modular F.R.L./pressure control equipment, lubrication equipment, fittings and tubings, flow control equipment, speed controllers, silencers/exhaust cleaners/blow guns/pressure gauges, switches/sensors/controllers, and static neutralization equipment. It also provides process valves, chemical liquid valves/fittings and needle valves/tubings, process pumps, temperature control equipment, process gas equipment, high vacuum equipment, industrial filters/sintered metal elements, pneumatic instrumentation equipment, and hydraulic equipment. The company was formerly known as Shoketsu Kinzoku Kogyo Co., Ltd. and changed its name to SMC Corporation in April 1986. SMC Corporation was incorporated in 1959 and is headquartered in Tokyo, Japan.

How the Company Makes Money

SMC Corporation generates revenue by designing, manufacturing, and selling pneumatic and electric equipment used in industrial automation. Its key revenue streams include the sale of actuators, valves, air preparation units, and sensors, which are essential components for various automated systems in industries such as automotive, electronics, and manufacturing. The company maintains strategic partnerships with distributors and manufacturers worldwide to ensure the widespread distribution of its products. SMC's focus on research and development to innovate and improve its product offerings also plays a crucial role in maintaining its competitive edge and driving sales growth.

SMC (OR) Financial Statement Overview

Summary

The company has demonstrated solid revenue growth and strong profitability, with efficient cost management reflected in gross and net profit margins. The balance sheet is robust with high equity and low leverage, although cash flow fluctuations should be monitored for continued stability.

Income Statement

The company has demonstrated solid revenue growth over the years, with a notable increase from 2020 to 2025. Gross and net profit margins are strong, indicating efficient cost management and profitability. The EBIT and EBITDA margins further highlight the company's operational efficiency. However, a slight decline in net income in the latest year should be monitored for potential impacts.

Balance Sheet

The balance sheet is robust, with a high equity ratio indicating financial stability. The debt-to-equity ratio is low, suggesting minimal leverage risk. Strong stockholders' equity and a significant cash position highlight the company's solid financial foundation. However, the decreasing trend in total liabilities should be watched for future implications.

Cash Flow

The company's free cash flow has shown considerable improvement, indicating effective cash management. The operating cash flow to net income ratio is healthy, supporting operational sustainability. However, fluctuations in free cash flow over the years suggest potential volatility in cash generation.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	784.71B	792.11B	776.87B	824.77B	727.40B	552.18B
Gross Profit	355.01B	363.04B	363.08B	421.16B	363.85B	265.85B
EBITDA	221.01B	245.45B	229.58B	283.97B	248.42B	171.94B
Net Income	161.40B	156.34B	178.32B	224.61B	192.99B	121.79B
Balance Sheet
Total Assets	2.03T	2.10T	2.09T	1.93T	1.77T	1.54T
Cash, Cash Equivalents and Short-Term Investments	547.04B	685.55B	511.29B	623.50B	697.05B	640.55B
Total Debt	13.87B	5.04B	13.07B	12.19B	11.54B	10.79B
Total Liabilities	204.40B	172.46B	208.69B	225.62B	210.68B	159.88B
Stockholders Equity	1.82T	1.93T	1.88T	1.70T	1.56T	1.38T
Cash Flow
Free Cash Flow	0.00	89.92B	-6.10B	27.24B	75.16B	91.18B
Operating Cash Flow	0.00	196.66B	98.21B	101.62B	156.09B	120.47B
Investing Cash Flow	0.00	35.23B	-131.90B	-87.09B	-116.22B	73.44B
Financing Cash Flow	0.00	-100.20B	-87.93B	-113.30B	-88.93B	-56.01B

SMC (OR) Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 51150.00
• 50DMA: Positive
• 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:6273, the sentiment is Negative. The current price of 51150 is below the 20-day moving average (MA) of 52217.50, above the 50-day MA of 50440.60, and below the 200-day MA of 57341.96, indicating a neutral trend. The MACD of -332.53 indicates Positive momentum. The RSI at 46.46 is Neutral, neither overbought nor oversold. The STOCH value of 42.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6273.

SMC (OR) Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6273	75 Outperform	$3.16T	20.64	8.08%	1.98%	1.96%	-11.64%
Sector *	71 Outperform	¥255.65B	12.96	8.49%	3.12%	6.31%	12.92%
DAIUF		$9.67B	19.29	19.46%	1.60%	―	―
EBCOF		$7.78B	16.25	16.07%	2.42%	―	―
NNDNF		$23.89B	20.95	9.86%	1.33%	―	―
6845	80 Outperform	¥703.35B	16.91		1.97%	3.24%	36.34%
6954	73 Outperform	¥3.49T	23.96		2.59%	0.23%	12.16%

SMC (OR) Corporate Events

SMC Corporation Completes Strategic Share Repurchase Program

SMC Corporation announced the completion of its share repurchase program, initially resolved by the Board of Directors in August 2024. The company successfully repurchased 399,200 shares for approximately 24.99 billion yen, which is part of a strategic move to enhance shareholder value and optimize capital structure.