Sumitomo Heavy Industries (6302) AI Stock Analysis

• Market Cap: ¥756.21B
• Dividend Yield: 2.95%
• Average Volume (3M): 672.00K
• Price to Earnings (P/E): 24.0
• Beta (1Y): 1.23
• Revenue Growth: -2.67%
• EPS Growth: -85.21%
• Country: JP
• Employees: 25,337
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 91.84
• Shares Outstanding: 122,905,480
• 10 Day Avg. Volume: 577,350
• 30 Day Avg. Volume: 672,000
• PEG Ratio: 0.04
• Price to Book (P/B): 0.70
• Price to Sales (P/S): 0.40
• P/FCF Ratio: 16.81
• 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: ¥5,255.93
• Price Target Upside: -14.86% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): 269.2
• Revenue Forecast (FY): ¥1.08T

• Rating: 59 Neutral
• Price Target: ¥5,250.00 ▼(-14.95% Downside)
• Action: Reiterated Date: 11/21/25
• Date: Action: Reiterated 11/21/25

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

Diversified business model & recurring services

Sumitomo Heavy's broad product mix and after-sales engineering and maintenance services create diversified, recurring revenue streams. Exposure to industrial machinery, logistics, precision/semiconductor, and energy reduces single-market cyclicality and supports steadier long-term cash flow.

Strong equity base

A high equity ratio provides resilience through downturns and flexibility to fund large projects or capex without immediate refinancing. This balance-sheet strength supports long-duration project execution and preserves borrowing capacity for strategic investments.

Stable gross profit margin

A roughly 24% gross margin indicates durable product-level profitability and pricing power across equipment and components. Stable gross margins help absorb variations in volumes and support recovery of operating margins when revenue growth resumes.

Negative Factors

Declining revenue trend

A multi-percent revenue decline signals exposure to weaker industrial capex cycles or lost end-market demand. Persistent top-line contraction erodes scale, reduces fixed-cost leverage, and limits the company's ability to expand aftermarket services and invest in growth initiatives.

Negative free cash flow

Negative free cash flow from higher capex and weaker operating cash flow reduces internal funding for dividends, debt reduction, and R&D. Over time this can force higher leverage or constrained investment, limiting strategic flexibility and long-term competitiveness.

Falling profitability / thin net margin

A sharp fall in net margin and low ROE indicate weakening ability to convert sales into shareholder returns. This persistent profitability pressure can hinder reinvestment, make large projects more risky, and challenge management's capacity to improve long-term operational efficiency.

Sumitomo Heavy Industries Business Overview & Revenue Model

Company Description

Sumitomo Heavy Industries, Ltd. manufactures and sells general machinery, advanced precision machinery, construction machinery, ships, and environmental plant facilities in Japan and internationally. The company operates through four segments: Mechatronics, Industrial Machinery, Logistics & Construction, and Energy & Lifelines. Its Mechatronics segment offers gear reducers, motors, and boxes; motion control drives, inverters, precision positioning equipment, laser processing systems, control systems and components, motion components, and drive and collaborative robot solutions. The company's Industrial Machinery segment provides plastics machinery, film forming machines, cryogenic equipment, precision forgings, semiconductor production equipment, medical machines and equipment, forging press machines, machining tools, air conditioning equipment, defense equipment, injection molding machines, transfer molding presses, cryocoolers, cryopumps, ion accelerators and implanters, cyclotrons, tracer production systems, proton therapy systems, vacuum coating equipment, steel tube air forming systems, lifting magnets, spinning machines, clean room systems, dust collectors, cast iron and steel rolls, surface grinding machines, coolant systems, and extrusion coating products. Its Logistics & Construction segment offers hydraulic excavators, mobile cranes, road machinery, material handling systems, logistics systems, automated parking systems, road machinery, crawler cranes, foundation machines, and forklifts. The company's Energy & Lifelines segment provides private power generation facilities, boilers, air pollution control equipment, water and sewage treatment systems, industrial waste treatment facilities, turbines, pumps, process equipment, pressure vessels, mixing vessels, food processing machinery, ships, circulating and bubbling fluidized bed boilers, liquid air energy storage, rotary kiln-type recycling facilities, electrostatic precipitators, ash handling systems, evaporation and crystallization facilities, fluidized bed gasifiers, waste heat boilers, waste-to-energy plants, CFB scrubbers, baghouses, flue gas denitrification systems, plant operation support systems, industrial waste water treatment facilities, water and sewage treatment systems, steam turbines, process pumps, distillation technology and extractors, reactor vessels, mixing vessels, coke oven machines, food and beverage manufacturing facilities, and oil tankers. The company was founded in 1888 and is headquartered in Tokyo, Japan.

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	Mar 2022	Mar 2021
Income Statement
Total Revenue	1.07T	1.07T	1.08T	1.14T	943.98B	849.07B
Gross Profit	260.90B	257.00B	255.25B	251.54B	211.96B	185.45B
EBITDA	89.03B	62.69B	110.74B	102.80B	96.53B	79.17B
Net Income	30.94B	7.72B	32.74B	7.71B	44.05B	26.76B
Balance Sheet
Total Assets	1.32T	1.26T	1.20T	1.15T	1.09T	1.03T
Cash, Cash Equivalents and Short-Term Investments	111.07B	111.13B	104.46B	97.48B	88.78B	99.52B
Total Debt	252.70B	238.62B	162.23B	171.74B	111.25B	124.44B
Total Liabilities	634.30B	613.82B	573.39B	571.95B	528.09B	525.76B
Stockholders Equity	681.67B	640.68B	619.77B	569.26B	551.39B	490.70B
Cash Flow
Free Cash Flow	11.33B	-34.92B	25.91B	-15.18B	16.04B	24.29B
Operating Cash Flow	63.67B	12.76B	65.37B	21.37B	61.68B	64.13B
Investing Cash Flow	-59.36B	-49.48B	-43.27B	-37.28B	-49.68B	-43.73B
Financing Cash Flow	-7.14B	41.91B	-17.21B	21.68B	-28.11B	-7.96B

Sumitomo Heavy Industries Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6173.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 6173 is above the 20-day moving average (MA) of 5621.55, above the 50-day MA of 4928.34, and above the 200-day MA of 3790.67, indicating a bullish trend. The MACD of 292.22 indicates Negative momentum. The RSI at 76.88 is Negative, neither overbought nor oversold. The STOCH value of 80.94 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
6622	73 Outperform	¥328.31B	25.60	―	1.65%	14.49%	-21.17%
6113	72 Outperform	¥824.26B	27.50	5.14%	3.31%	-1.14%	-19.79%
6268	71 Outperform	$594.58B	38.64	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	€752.32B	36.66	11.66%	1.03%	10.11%	41.98%
6302	59 Neutral	¥756.21B	23.98	0.59%	2.95%	-2.67%	-85.21%
6481	55 Neutral	¥631.46B	98.88	1.88%	6.16%	1.98%	-48.28%

Sumitomo Heavy Industries Corporate Events

Sumitomo Heavy Industries to Transfer Parking System Business to IHI Transport Machinery

Sumitomo Heavy Industries announced that its consolidated subsidiary SHI-MH will transfer its parking system business to IHI Transport Machinery Co., Ltd. via an absorption-type company split, under a basic agreement signed on January 26, 2026. The move is part of the group’s “Selection and Concentration” strategy under its Medium-Term Management Plan 2026, aiming to reallocate management resources toward higher-growth areas while ensuring the parking business and its employees can grow under IHI Transport Machinery, a leading player in the parking system industry. The transaction, scheduled to take effect on November 1, 2026, will see IHI Transport Machinery assume the assets, liabilities, contracts and related rights and obligations of the parking system business, with no capital increase or decrease at SHI-MH, and the company expects no issues with the successor’s ability to meet its financial obligations.

The most recent analyst rating on (JP:6302) stock is a Hold with a Yen5017.00 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 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.