Union Tool Co. (JP:6278)
:6278
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Union Tool Co.
(6278)
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Rating:72Outperform
Price Target:
¥15,440.00
▲(70.99% Upside)
Action:ReiteratedDate:03/24/26
The score is primarily driven by strong fundamentals—high margins and an exceptionally conservative, low-debt balance sheet—tempered by a sharp deterioration in 2025 free cash flow. Technicals add a modestly positive but mixed signal, while valuation (P/E ~24 with a sub-1% yield) is a mild headwind.
Positive Factors
High margins and consistent profitability
Sustained gross margins near 40% and EBIT margins around 21–22% indicate durable pricing power and cost control in precision tooling. Such structural profitability supports reinvestment, R&D and steady operating profitability across cycles, reinforcing long-term cash earnings potential.
Negative Factors
Free cash flow collapsed in 2025
A near-zero free cash flow outcome in 2025, despite solid accounting earnings, signals a material disconnect between profits and distributable cash. If sustained, this undermines cash available for dividends, buybacks or debt reduction and increases sensitivity to working-capital swings.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins and consistent profitability
Sustained gross margins near 40% and EBIT margins around 21–22% indicate durable pricing power and cost control in precision tooling. Such structural profitability supports reinvestment, R&D and steady operating profitability across cycles, reinforcing long-term cash earnings potential.
Read all positive factors
Union Tool Co. (6278) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥259.14B
Dividend Yield1.17%
Average Volume (3M)193.44K
Price to Earnings (P/E)24.1
Beta (1Y)1.28
Revenue Growth29.51%
EPS Growth48.81%
CountryJP
Employees1,454
SectorIndustrials
Sector Strength72
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)84.41
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)438.15
Revenue Forecast (FY)¥45.00B
Union Tool Co. Business Overview & Revenue Model
Company Description
Union Tool Co. produces and sells cutting tools, linear motion products, and metal machining equipment in Japan and internationally. It offers printed circuit board (PCB) drills/routers; PCB tools-related equipment, such as MDP drill pointers, rin...
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 | 35.06B | 40.16B | 32.61B | 25.34B | 29.09B | 28.17B |
| Gross Profit | 14.43B | 16.04B | 13.10B | 8.94B | 11.52B | 10.55B |
| EBITDA | 10.92B | 11.98B | 9.73B | 6.44B | 8.78B | 8.07B |
| Net Income | 5.61B | 6.11B | 5.28B | 3.08B | 5.00B | 3.80B |
Balance Sheet | ||||||
| Total Assets | 80.98B | 88.20B | 78.86B | 70.61B | 69.14B | 64.53B |
| Cash, Cash Equivalents and Short-Term Investments | 18.50B | 18.11B | 18.13B | 20.07B | 20.97B | 17.58B |
| Total Debt | 435.00M | 0.00 | 427.00M | 186.00M | 890.00M | 313.00M |
| Total Liabilities | 6.87B | 8.20B | 5.72B | 3.32B | 5.51B | 5.47B |
| Stockholders Equity | 74.11B | 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
Neutral
9030.00
Price Trends
12868.20
Positive
10651.75
Positive
8676.68
Positive
Market Momentum
337.63
Positive
47.63
Neutral
28.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6278, the sentiment is Neutral. The current price of 9030 is below the 20-day moving average (MA) of 15109.50, below the 50-day MA of 12868.20, and above the 200-day MA of 8676.68, indicating a neutral trend. The MACD of 337.63 indicates Positive momentum. The RSI at 47.63 is Neutral, neither overbought nor oversold. The STOCH value of 28.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
83 Outperform | ¥163.56B | 7.03 | ― | 2.33% | 25.95% | 66.92% | |
77 Outperform | ¥21.71B | 14.20 | ― | 3.31% | 0.97% | -10.47% | |
72 Outperform | ¥259.14B | 24.11 | ― | 1.17% | 29.51% | 48.81% | |
72 Outperform | ¥235.15B | 13.29 | 7.86% | 2.55% | 0.57% | 4.54% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | ¥112.98B | 17.03 | 2.64% | 2.30% | -4.11% | 46.76% | |
50 Neutral | ¥12.50B | -0.51 | ― | 6.98% | -11.46% | 43.93% |
* Industrials Sector Average
JP:6278
Union Tool Co.
15,000.00
10,811.56
258.13%
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2,539.50
897.27
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88.58%
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106.15
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308.00
-136.00
-30.63%
Union Tool Co. Corporate Events
Union Tool Weighs Cutting Investment Unit to Boost Share Liquidity
Mar 18, 2026
Union Tool Co. has outlined its stance on reducing the minimum investment unit for its shares, viewing a lower unit size as a way to invigorate the stock market. The company believes such a move could improve liquidity and make its stock more acce...
Union Tool Lifts Year-End Dividend, Adds Commemorative Payout for 65th Anniversary
Feb 24, 2026
Union Tool Co. has proposed a year-end dividend of 70 yen per share for the fiscal year ended December 31, 2025, up from 60 yen a year earlier, bringing the total annual dividend to 130 yen versus 105 yen previously. The plan, to be voted on at th...
Union Tool Raises FY2025 Year-end Dividend Forecast and Boosts Shareholder Payouts
Feb 12, 2026
Union Tool Co. has revised its year-end dividend forecast for the fiscal year ending December 31, 2025, raising the planned payout from 65 yen to 70 yen per share, including a 5 yen commemorative component subject to approval at the 65th Ordinary ...
Union Tool Co. Delivers Strong FY2025 Earnings and Maintains Robust Balance Sheet
Feb 12, 2026
Union Tool Co. reported strong results for the fiscal year ended December 2025, with net sales rising 23.2% year on year to ¥40.17 billion and operating profit climbing 26.9% to ¥8.73 billion, supported by an operating margin of 21.7%. P...
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.