Komatsu Ltd. (6301) AI Stock Analysis

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Komatsu Ltd.

(6301)

Rating:78Outperform

Price Target:

¥5,713.00

▲(13.35% Upside)

Komatsu Ltd.'s overall stock score reflects strong financial health and valuation, buoyed by technical indicators supporting potential growth. However, recent earnings call highlights challenges in sales and income, which temper the outlook despite notable segment successes and strategic project wins.

Komatsu Ltd. (6301) vs. iShares MSCI Japan ETF (EWJ)

Market Cap

¥4.65T

Dividend Yield3.77%

Average Volume (3M)3.42M

Price to Earnings (P/E)11.1

Beta (1Y)1.31

Revenue Growth3.12%

EPS Growth8.28%

CountryJP

Employees65,738

SectorIndustrials

Sector Strength75

IndustryAgricultural - Machinery

Share Statistics

EPS (TTM)99.08

Shares Outstanding950,953,100

10 Day Avg. Volume3,349,070

30 Day Avg. Volume3,421,886

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

¥5,272.17

Price Target Upside4.61% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering6

Komatsu Ltd. Business Overview & Revenue Model

Company DescriptionKomatsu Ltd. manufactures and sells construction, mining, and utility equipment; and forest and industrial machinery worldwide. The company operates through three segments: Construction, Mining and Utility Equipment; Retail Finance; and Industrial Machinery and Others. It offers construction and mining equipment, including electric rope shovels, continuous miners, hydraulic excavators, wheel loaders, bulldozers, motor graders, dump trucks, mini excavators, utility equipment, and other mining equipment. The company also provides forklift trucks; forestry equipment, including harvesters, forwarders, and feller bunchers, as well as forestry-specific machines based on construction equipment; recycling equipment, such as mobile crushers, soil recyclers, and mobile tub grinders; tunneling machines, which comprise shield and tunnel-boring machines, as well as small diameter pipe jacking machines; and diesel engines, hydraulic equipment, and iron and steel castings products. In addition, it offers metal forging and stamping presses, including large presses, and small and medium-sized presses; sheet-metal machines, such as press brakes, shears, laser cutting machines, and fine plasma cutting machines; machine tools, which comprise crankshaft millers, transfer machines, machining centers, grinding machines, and wire saws; excimer lasers for semiconductor lithography tools; thermoelectric modules and temperature-control equipment for semiconductor manufacturing; and defense-related equipment, as well as provides warehousing and packing services. Further, the company provides other specific equipment for demolition, metal recycle, and slag handling; wear parts, periodic replacement parts, attachments, and remanufacturing parts; and retail financing for construction and mining equipment. Komatsu Ltd. was founded in 1884 and is headquartered in Tokyo, Japan.

How the Company Makes MoneyKomatsu Ltd. generates revenue primarily through the sale and leasing of its construction and mining equipment. The company's key revenue streams include the manufacturing and sale of machinery and equipment, providing after-sales services, and offering leasing options for its products. Komatsu also benefits from its parts and service business, which ensures a steady stream of revenue through the provision of maintenance, repairs, and spare parts to its customers globally. Additionally, Komatsu has strategic partnerships with other companies to enhance its technological capabilities and expand its reach into emerging markets, further bolstering its revenue potential.

Komatsu Ltd. Earnings Call Summary

Earnings Call Date:Jul 29, 2025

(Q1-2025)

% Change Since: -5.32%|

Next Earnings Date:Nov 04, 2025

Earnings Call Sentiment Negative

The earnings call revealed a challenging Q1 for Komatsu, with significant declines in net sales, operating income, and net income due to currency exchange impacts and reduced sales volume. However, there were positive developments in the retail finance and industrial machinery segments, alongside strategic wins like the Reko Diq project. Despite these achievements, the adverse conditions in major markets like North America, Japan, and Indonesia weighed heavily on the overall performance.

Q1-2025 Updates

Positive Updates

Retail Finance Segment Profit Growth

Segment profit in the retail finance business increased by 22.5% YoY to JPY9.4 billion, driven by lower procurement costs.

Industrial Machinery Segment Profit Increase

Despite a 4.6% decrease in sales to JPY43.5 billion, the segment profit expanded by 43.5% YoY to JPY7.2 billion, with the segment profit ratio increasing to 16.6%.

New Contract for Reko Diq Mining Project

Komatsu signed a significant contract to supply mining equipment for the Reko Diq copper and gold mining project, amounting to approximately USD440 billion, marking the company's first large-scale order in the Middle East.

Introduction of Power-Agnostic Truck

Komatsu introduced a new power-agnostic truck model at the Aitik copper mine, capable of transitioning to lower-emission power sources like battery electric or hydrogen fuel cells.

Negative Updates

Decline in Net Sales and Operating Income

Net sales decreased by 5.2% YoY to JPY909.5 billion, and operating income decreased by 10.6% to JPY140.4 billion, affected by yen appreciation and decreased sales volume.

Significant Decline in North American Mining Equipment Sales

Sales in the construction, mining & utility equipment segment in North America saw a significant decline, primarily due to decreased sales of mining equipment.

Decreased Net Income

Net income decreased by 16.9% YoY to JPY91.2 billion, with the operating income ratio down by 1 point to 15.4%.

Challenges in Japanese and Indonesian Markets

The Japanese market saw a 16% decrease in demand YoY, while Indonesian market sentiment was negatively impacted by declining coal prices and regulatory changes.

Company Guidance

In the call, Komatsu Limited provided guidance for fiscal year 2025, highlighting several key metrics. The exchange rates were noted as JPY145.5 to the US dollar, JPY162.5 to the euro, and JPY92.6 to the Australian dollar, with the yen appreciating against these currencies compared to the previous year. Net sales for Q1 fiscal 2025 decreased by 5.2% year-over-year to JPY909.5 billion, while operating income fell by 10.6% to JPY140.4 billion, resulting in a one-point drop in the operating income ratio to 15.4%. Net income also saw a significant decline of 16.9% to JPY91.2 billion. Segment-wise, construction, mining, and utility equipment sales dropped by 5.5% to JPY844.9 billion, with segment profit decreasing by 14.1% to JPY122.3 billion. In contrast, the retail finance segment profit increased by 22.5% to JPY9.4 billion, despite flat sales year-over-year. Meanwhile, the industrial machinery and others segment experienced a 4.6% sales decline to JPY43.5 billion but saw a substantial 43.5% increase in segment profit to JPY7.2 billion. The company also noted a JPY72.7 billion increase in total assets, primarily due to an increase in inventory assets, and indicated a full-year forecast that remains unchanged from April, with expectations for a 10% year-over-year decrease in mining equipment sales to JPY1,727.9 billion.

Komatsu Ltd. Financial Statement Overview

Summary

Komatsu Ltd. demonstrates strong revenue growth, profitability, and robust cash flow generation. The company maintains a stable balance sheet with moderate leverage and efficient capital use. Vigilant monitoring of debt levels is advisable.

Income Statement

Very Positive

Komatsu Ltd. demonstrates strong revenue growth and profitability. The Gross Profit Margin for 2025 is 32.21%, with an impressive Net Profit Margin of 10.71%. The Revenue Growth Rate from 2024 to 2025 is 6.19%, showcasing a consistent upward trajectory. EBIT and EBITDA margins are healthy at 16.16% and 20.11%, respectively, indicating operational efficiency and robust earnings performance.

Balance Sheet

Positive

The company maintains a stable financial structure with a Debt-to-Equity Ratio of 0.38, reflecting moderate leverage. Return on Equity (ROE) is strong at 13.84%, suggesting efficient use of equity. The Equity Ratio stands at 54.98%, indicating a solid equity base relative to total assets, though the increase in total debt warrants careful monitoring.

Cash Flow

Very Positive

Komatsu's cash flow generation is robust, with a Free Cash Flow Growth Rate of 34.23% from 2024 to 2025, reflecting improved capital efficiency. The Operating Cash Flow to Net Income Ratio is 1.18, indicating strong cash generation relative to net profits. A Free Cash Flow to Net Income Ratio of 0.71 supports the company's capability to fund operations and growth initiatives.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.10T	3.87T	3.54T	2.80T	2.19T
Gross Profit	1.32T	1.21T	1.04T	779.58B	581.05B
EBITDA	825.44B	787.01B	658.49B	473.14B	309.67B
Net Income	439.26B	393.43B	326.40B	224.93B	106.24B
Balance Sheet
Total Assets	5.77T	5.64T	4.88T	4.35T	3.78T
Cash, Cash Equivalents and Short-Term Investments	385.57B	403.18B	289.98B	316.67B	243.13B
Total Debt	1.22T	1.27T	1.12T	1.01T	965.85B
Total Liabilities	2.43T	2.44T	2.20T	1.99T	1.77T
Stockholders Equity	3.17T	3.03T	2.54T	2.23T	1.91T
Cash Flow
Free Cash Flow	311.31B	231.83B	22.94B	138.01B	172.58B
Operating Cash Flow	517.17B	434.78B	206.47B	300.97B	354.13B
Investing Cash Flow	-210.67B	-204.42B	-169.52B	-143.57B	-163.06B
Financing Cash Flow	-321.42B	-122.04B	-66.61B	-93.87B	-199.67B

Komatsu Ltd. Technical Analysis

Technical Analysis Sentiment

Positive

Last Price5040.00

Price Trends

50DMA

4760.26

Positive

100DMA

4488.88

Positive

200DMA

4352.07

Positive

Market Momentum

MACD

51.15

Positive

RSI

56.10

Neutral

STOCH

80.81

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6301, the sentiment is Positive. The current price of 5040 is above the 20-day moving average (MA) of 5002.45, above the 50-day MA of 4760.26, and above the 200-day MA of 4352.07, indicating a bullish trend. The MACD of 51.15 indicates Positive momentum. The RSI at 56.10 is Neutral, neither overbought nor oversold. The STOCH value of 80.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6301.

Komatsu Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (71)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6301	78 Outperform	¥4.65T	11.06		3.77%	3.12%	8.28%
Sector *	71 Outperform	¥267.81B	14.80	8.32%	2.78%	6.12%	11.24%
HTCMF	―	$6.79B	14.86	8.52%	4.44%	―	―
KUBTF	―	$13.87B	11.74	7.15%	2.78%	―	―
TN0	―	€779.11M	22.00	3.22%	―	―	―
6432	―	¥258.94B	10.18		3.66%	―	―
7105	55 Neutral	¥211.68B	79.89		1.20%	-6.01%	-90.78%

* Industrials Sector Average

Performance Comparison

JP:6301

Komatsu Ltd.

5,040.00

1,061.59

26.68%

HTCMF

Hitachi Construction Machinery Co

32.08

9.15

39.90%

KUBTF

Kubota

12.24

-1.16

-8.66%

DE:TN0

TADANO

6.15

0.28

4.77%

JP:6432

Takeuchi Mfg.Co., Ltd.

5,470.00

1,198.05

28.04%

JP:7105

Mitsubishi Logisnext Co., Ltd.

2,000.00

761.90

61.54%

Komatsu Ltd. Corporate Events

Komatsu Announces Progress in Share Buyback Initiative

Aug 1, 2025

Komatsu Ltd. announced the status of its share buyback program, revealing that it repurchased 2,877,300 shares for approximately 14.1 billion yen between July 1 and July 31, 2025. This buyback is part of a broader initiative approved by the Board of Directors to repurchase up to 40 million shares, reflecting a strategic move to enhance shareholder value and optimize capital structure.

The most recent analyst rating on (JP:6301) stock is a Hold with a Yen4000.00 price target. To see the full list of analyst forecasts on Komatsu Ltd. stock, see the JP:6301 Stock Forecast page.

Komatsu Ltd. Continues Performance-Linked Remuneration System

Jul 29, 2025

Komatsu Ltd. announced the continuation of its performance-linked stock-based remuneration system for its directors and senior managerial employees. This system, which aligns with the company’s Strategic Growth Plan for 2025-2027, aims to enhance corporate value by incentivizing eligible persons based on performance indicators such as ROE, ROA, and sales growth. The plan includes structures like the Board Incentive Plan Trust and Employee Stock Ownership Plan Trust, designed to deliver shares or equivalent cash payments depending on the achievement of performance targets, thereby reinforcing Komatsu’s commitment to long-term growth and stakeholder value.