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Union Tool Co.
(6278)
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Rating:64Neutral
Price Target:
¥20,437.00
▲(126.32% Upside)
Action:Reiterated
Date:08/06/26
The score is driven primarily by strong underlying fundamentals—high and consistent margins and a fortress balance sheet with zero debt—tempered by a sharp deterioration in 2025 free cash flow. Technical indicators are currently weak, and valuation is a meaningful headwind given the high P/E and low dividend yield.
Positive Factors
High and consistent margins
Sustained high gross and EBIT margins indicate durable pricing power, efficient production and a differentiated product set. These margins support long-term cash earnings capacity, cushioning profit cycles and enabling reinvestment or shareholder returns even through moderate demand swings.
Negative Factors
Free cash flow collapse in 2025
A sharp drop in free cash flow despite reported profits points to weaker cash conversion from operations or heavier reinvestment. Persistent FCF weakness would restrict dividends, buybacks and discretionary investments, reducing shareholder optionality over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
High and consistent margins
Sustained high gross and EBIT margins indicate durable pricing power, efficient production and a differentiated product set. These margins support long-term cash earnings capacity, cushioning profit cycles and enabling reinvestment or shareholder returns even through moderate demand swings.
Read all positive factors
Union Tool Co. (6278) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥318.94B
Dividend Yield0.89%
Average Volume (3M)193.44K
Price to Earnings (P/E)31.7
Beta (1Y)1.52
Revenue Growth39.69%
EPS Growth58.96%
CountryJP
Employees1,530
SectorIndustrials
Sector Strength72
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)425.51
Shares Outstanding19,780,000
10 Day Avg. Volume167,400
30 Day Avg. Volume193,436
Financial Highlights & Ratios
PEG Ratio1.54
Price to Book (P/B)1.84
Price to Sales (P/S)3.67
P/FCF Ratio1.94K
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)617.35
Revenue Forecast (FY)¥53.50B
Union Tool Co. Business Overview & Revenue Model
Company Description
Union Tool Co. manufactures and distributes a diverse range of cutting implements, linear motion systems, and machinery for metal processing, catering to both the Japanese domestic market and international clients. Their extensive product line fea...
How the Company Makes Money
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Union Tool Co. Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
95
Very Positive
Cash Flow
62
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 43.91B | 40.16B | 32.61B | 25.34B | 29.09B | 28.17B |
| Gross Profit | 17.68B | 16.04B | 13.10B | 8.94B | 11.52B | 10.55B |
| EBITDA | 13.59B | 11.65B | 9.82B | 6.76B | 10.01B | 7.87B |
| Net Income | 7.38B | 6.11B | 5.28B | 3.08B | 5.00B | 3.80B |
Balance Sheet | ||||||
| Total Assets | 91.10B | 88.20B | 78.86B | 70.61B | 69.14B | 64.53B |
| Cash, Cash Equivalents and Short-Term Investments | 14.22B | 18.11B | 18.13B | 20.07B | 20.97B | 17.58B |
| Total Debt | 219.00M | 0.00 | 427.00M | 186.00M | 890.00M | 313.00M |
| Total Liabilities | 8.67B | 8.20B | 5.72B | 3.32B | 5.51B | 5.47B |
| Stockholders Equity | 82.43B | 80.00B | 73.14B | 67.28B | 63.63B | 59.06B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 76.00M | 3.18B | 228.00M | 4.18B | 3.21B |
| Operating Cash Flow | 0.00 | 7.51B | 7.28B | 4.69B | 6.71B | 5.83B |
| Investing Cash Flow | 0.00 | -6.80B | -7.27B | -5.01B | -1.96B | -3.16B |
| Financing Cash Flow | 0.00 | -2.26B | -1.68B | -1.61B | -1.55B | -1.44B |
Union Tool Co. Technical Analysis
Negative
9030.00
Price Trends
20269.30
Negative
18853.06
Negative
14530.63
Positive
Market Momentum
-918.88
Negative
43.31
Neutral
42.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6278, the sentiment is Negative. The current price of 9030 is below the 20-day moving average (MA) of 16896.50, below the 50-day MA of 20269.30, and below the 200-day MA of 14530.63, indicating a neutral trend. The MACD of -918.88 indicates Negative momentum. The RSI at 43.31 is Neutral, neither overbought nor oversold. The STOCH value of 42.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6278.
Union Tool Co. Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | ¥361.78B | 15.78 | 11.26% | 2.47% | 12.95% | 66.36% | |
76 Outperform | ¥21.37B | 12.25 | ― | 3.31% | 7.28% | 33.22% | |
70 Outperform | ¥290.15B | 15.07 | ― | 2.33% | 23.70% | 56.28% | |
64 Neutral | ¥318.94B | 31.70 | ― | 1.17% | 39.69% | 58.96% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | ¥138.19B | 18.95 | 3.95% | 2.30% | 3.28% | 58.68% | |
49 Neutral | ¥13.27B | -0.48 | ― | ― | -1.43% | -1450.24% |
* Industrials Sector Average
JP:6278
Union Tool Co.
16,370.00
8,934.33
120.15%
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Union Tool Co. Corporate Events
Union Tool Delivers Strong Half-Year Profits and Hikes Dividend
Aug 6, 2026
Union Tool Co. reported a sharp improvement in its semi-annual results for the period ended June 2026, with net sales rising 48.3% year on year to ¥27.1 billion and operating profit jumping 81.4% to ¥7.6 billion. Ordinary profit more tha...
Union Tool Lifts Full-Year Outlook and Dividends on AI-Driven Demand Surge
Aug 6, 2026
Union Tool reported that first-half FY2026 results far outpaced its earlier guidance, with net sales, operating profit and profit attributable to owners of the parent all significantly above forecast, helped by robust overseas demand for server pa...
Union Tool Confirms Full Take-Up of Third-Party Allotment to Fund Capacity Expansion
May 15, 2026
Union Tool has confirmed that the underwriter will subscribe in full to a third-party allotment of 270,000 treasury shares, priced at ¥15,645.80 per share, raising approximately ¥4.22 billion, with payment due on May 20, 2026. Following ...
Union Tool Lifts 2026 Earnings Outlook on AI-Driven Demand and Capacity Expansion
May 13, 2026
Union Tool has sharply raised its consolidated forecasts for the first half and full year ending December 31, 2026, projecting double-digit percentage increases in net sales and profits versus its February guidance and the prior year. The company ...
Union Tool Delivers Sharp Profit Surge on Strong First-Quarter Sales
May 13, 2026
Union Tool Co. reported strong consolidated results for the first quarter of fiscal 2026, with net sales climbing 42.6% year on year to ¥12.55 billion and operating profit surging 60.4% to ¥3.54 billion. Ordinary profit rose 82.0% to ...
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.