Sumitomo Heavy Industries (6302) AI Stock Analysis

• Market Cap: ¥541.83B
• Dividend Yield: 2.95%
• Average Volume (3M): 672.00K
• Price to Earnings (P/E): 159.9
• Beta (1Y): 1.17
• Revenue Growth: -2.67%
• EPS Growth: -85.21%
• Country: JP
• Employees: 25,337
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 62.41
• Shares Outstanding: 122,905,480
• 10 Day Avg. Volume: 577,350
• 30 Day Avg. Volume: 672,000
• PEG Ratio: -0.67
• Price to Book (P/B): 0.61
• Price to Sales (P/S): 0.37
• P/FCF Ratio: -11.23
• 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: ¥3,381.05
• Price Target Upside: -16.21% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: ¥4,150.00 ▲(2.85% Upside)

The overall stock score is primarily influenced by financial performance and technical analysis. The company's strong equity position is offset by declining profitability and negative cash flow. Technical indicators show some positive momentum, but the high P/E ratio suggests overvaluation, impacting the overall score.

Positive Factors

Strong Equity Position

A strong equity position indicates financial stability, providing a solid foundation for future investments and resilience against economic downturns.

Diverse Revenue Streams

Diversification across multiple sectors reduces dependency on a single market, enhancing long-term revenue stability and growth potential.

Technological Capabilities

Advanced technologies in energy and environmental sectors position SHI for growth in these expanding markets, supporting long-term competitiveness.

Negative Factors

Declining Profitability

Decreasing profitability can hinder reinvestment opportunities and affect shareholder returns, challenging long-term financial health.

Negative Free Cash Flow

Negative free cash flow indicates potential liquidity issues, limiting the company's ability to fund operations and growth initiatives.

Increased Leverage

Higher leverage increases financial risk, potentially impacting the company's ability to manage debt obligations and invest in growth.

Sumitomo Heavy Industries Business Overview & Revenue Model

Company Description

Sumitomo Heavy Industries, Ltd. (SHI) is a diversified manufacturing company based in Japan, primarily engaged in the production of machinery and equipment. It operates across multiple sectors, including industrial machinery, construction equipment, shipbuilding, and environmental solutions. The company is known for its high-quality products, which include hydraulic excavators, industrial robots, and large-scale machinery for various industries, as well as advanced technologies in energy and environmental sectors.

How the Company Makes Money

Sumitomo Heavy Industries generates revenue through a diverse range of business segments. Key revenue streams include the sale of construction machinery, such as hydraulic excavators and other heavy equipment, which are in demand in the global construction and mining industries. The company also earns income from its industrial machinery and systems division, which provides specialized equipment and automation solutions to various manufacturing sectors. Additionally, SHI engages in shipbuilding, contributing to its revenue through the construction of commercial vessels and specialized ships. Partnerships with other companies and government contracts, particularly in the environmental and energy sectors, also contribute significantly to its earnings, enabling SHI to leverage its technological capabilities and expand its market presence.

Sumitomo Heavy Industries Financial Statement Overview

Summary

Sumitomo Heavy Industries shows financial stability with a strong equity base, but faces challenges in profitability and cash flow management. The income margins are declining, and free cash flow is negative, indicating a need for better capital management.

Income Statement

The company's revenue has shown slight fluctuations, with recent revenue slightly declining from the previous year. Gross profit margin is stable at approximately 24%. However, net profit margin has significantly decreased from 3% to 0.7% due to reduced net income. EBIT and EBITDA margins have also decreased, indicating potential challenges in maintaining operational efficiency.

Balance Sheet

The balance sheet reveals a strong equity position, with a consistent equity ratio above 50%, highlighting financial stability. The debt-to-equity ratio has increased recently, indicating higher leverage, which could pose a risk if not managed carefully. Nevertheless, the return on equity remains moderate at around 1.2%.

Cash Flow

The company's free cash flow has turned negative, reflecting higher capital expenditures and a decline in operating cash flow. The operating cash flow to net income ratio remains robust, suggesting good cash generation relative to net earnings. However, the negative free cash flow to net income ratio highlights the need for better capital management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.05T	1.07T	1.08T	1.14T	943.98B	849.07B
Gross Profit	254.18B	257.00B	255.25B	251.54B	211.96B	185.45B
EBITDA	85.64B	62.69B	110.74B	102.80B	96.53B	79.17B
Net Income	3.32B	7.72B	32.74B	7.71B	44.05B	26.76B
Balance Sheet
Total Assets	1.26T	1.26T	1.20T	1.15T	1.09T	1.03T
Cash, Cash Equivalents and Short-Term Investments	108.65B	111.13B	104.46B	97.48B	88.78B	99.52B
Total Debt	250.74B	238.62B	162.23B	171.74B	111.25B	124.44B
Total Liabilities	622.62B	613.82B	573.39B	571.95B	528.09B	525.76B
Stockholders Equity	633.29B	640.68B	619.77B	569.26B	551.39B	490.70B
Cash Flow
Free Cash Flow	-2.33B	-34.92B	25.91B	-15.18B	16.04B	24.29B
Operating Cash Flow	46.76B	12.76B	65.37B	21.37B	61.68B	64.13B
Investing Cash Flow	-49.26B	-49.48B	-43.27B	-37.28B	-49.68B	-43.73B
Financing Cash Flow	3.44B	41.91B	-17.21B	21.68B	-28.11B	-7.96B

Sumitomo Heavy Industries Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4035.00
• 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:6302, the sentiment is Positive. The current price of 4035 is below the 20-day moving average (MA) of 4207.37, below the 50-day MA of 4136.43, and above the 200-day MA of 3377.86, indicating a bullish trend. The MACD of 64.25 indicates Negative momentum. The RSI at 68.70 is Neutral, neither overbought nor oversold. The STOCH value of 84.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6302.

Sumitomo Heavy Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6005	79 Outperform	¥357.86B	14.51	―	2.26%	31.34%	15.87%
6406	70 Outperform	¥430.35B	28.57	―	3.00%	0.32%	-15.41%
6481	70 Neutral	¥454.47B	71.17	1.88%	6.16%	1.98%	-48.28%
6268	65 Neutral	¥456.08B	29.29	5.25%	2.13%	-2.23%	130.96%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5631	59 Neutral	¥635.20B	28.81	11.66%	1.03%	10.11%	41.98%
6302	59 Neutral	¥541.83B	159.95	0.59%	2.95%	-2.67%	-85.21%

Sumitomo Heavy Industries Corporate Events

Sumitomo Heavy Industries Announces Leadership Restructuring

Sumitomo Heavy Industries announced significant changes in its leadership structure, effective January 1, 2026. The board meeting resolved to appoint Toshiro Watanabe as the new Representative Director, President, and CEO, while Shinji Shimomura will become the Chairman of the Board. These changes are part of a strategic reorganization aimed at enhancing the company’s operational efficiency and market competitiveness.

The most recent analyst rating on (JP:6302) stock is a Hold with a Yen4150.00 price target. To see the full list of analyst forecasts on Sumitomo Heavy Industries stock, see the JP:6302 Stock Forecast page.

Sumitomo Heavy Industries Reports Decline in Nine-Month Financial Performance

Sumitomo Heavy Industries reported a decline in its financial performance for the nine-month period ending September 30, 2025, with net sales decreasing by 2.4% and operating profit falling by 15.4% compared to the same period in the previous year. The company experienced a significant drop in comprehensive income by 73%, indicating challenges in maintaining profitability, which could impact its market positioning and stakeholder confidence.

The most recent analyst rating on (JP:6302) stock is a Hold with a Yen4745.00 price target. To see the full list of analyst forecasts on Sumitomo Heavy Industries stock, see the JP:6302 Stock Forecast page.