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Kubota Corporation (JP:6326)
:6326

Kubota (6326) AI Stock Analysis

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JP

Kubota

(OTC:6326)

Rating:70Outperform
Price Target:
¥1,733.00
▲(8.04%Upside)
Kubota's overall stock score is driven by strong financial performance and attractive valuation, despite technical indicators pointing to a bearish trend. The company's robust profit margins, effective equity utilization, and undervaluation compared to peers are key strengths. However, market momentum suggests caution due to the stock's current downtrend.
Positive Factors
Foreign Exchange Impact
Kubota's earnings and share price benefit significantly from a weaker yen, which could become an upside factor if the depreciation trend continues.
Management and Strategy
A major management reshuffle could lead to a meaningful announcement and potentially a major upgrade to the company's shareholder returns policy.
Retail Sales Recovery
Kubota expects retail sales volumes of compact construction machinery to recover slightly if interest rates continue to be lowered.
Negative Factors
Earnings Challenges
Earnings are unlikely to rise in the near term due to excess inventory in the North American compact construction machinery market.
Operating Profit Forecast
The initial guidance for the next fiscal year forecasts an 11% drop in operating profit, influenced by adverse foreign exchange effects.
Tariff Impact
Kubota only produces around 40% of agricultural machinery and 10% of construction machinery in the US, so it expects to be impacted if tariffs are raised.

Kubota (6326) vs. iShares MSCI Japan ETF (EWJ)

Kubota Business Overview & Revenue Model

Company DescriptionKubota Corporation manufactures and markets machinery and related solutions in the food, water, and environment markets in Japan, North America, Europe, Asia, and internationally. It operates in three segments: Farm & Industrial Machinery, Water & Environment, and Other. The Farm & Industrial Machinery segment offers tractors, power tillers, combine harvesters, rice transplanters, turf equipment, utility vehicles, other agricultural machinery, implements, attachments, post-harvest machinery, vegetable production equipment, and other agricultural equipment; cooperative drying, rice seedling, and gardening facilities; rice mill plants; scales, weighing and measuring control systems, and air purifiers; engines for farming, construction, industrial machinery, and generators; and mini excavators, wheel and skid steer loaders, compact track and, and other construction machinery related products. The Water & Environment segment provides ductile iron and plastic pipes, valves, and single stack drain fittings, as well as design and construction services; reformer and cracking tubes, hearth and steel mill rolls, TXAX friction materials, and spiral welded steel pipes; air-conditioning equipment; wastewater treatment equipment and plants, pumps and plants, membrane solutions, flue gas desulfurization apparatus, membrane methane fermentation plants, and bathtubs; and water purification, night-soil treatment, waste incinerating and melting, and waste shredding and sorting plants. The Other segment offers logistics; and roofing and siding materials. The company also engages in non-life insurance underwriting, finance leasing and factoring services, building maintenance, security guarding, transportation, storage, distribution, and cargo handling businesses; and export and import of repair parts related to farm equipment, engines, and construction machinery. It serves customers through a network of dealers. The company was founded in 1890 and is headquartered in Osaka, Japan.
How the Company Makes MoneyKubota makes money through the sale of its wide range of machinery and equipment primarily in the agricultural and construction sectors. Its main revenue streams include the sale of tractors, combine harvesters, and construction equipment like excavators and loaders. Additionally, the company generates income from the sale of engines and water technology-related products. Kubota also benefits from a global distribution network and various strategic partnerships that help expand its market reach and enhance its earnings potential. The company's focus on innovation and sustainability further contributes to its competitive edge and financial performance.

Kubota Financial Statement Overview

Summary
Kubota presents a financially stable entity with strong profitability and operational efficiency. The income statement shows healthy margins, though revenue growth has stagnated. The balance sheet displays a solid equity foundation despite increased leverage, which could introduce risk if debt levels continue to rise. Cash flow management has improved recently, but historical volatility suggests a need for caution. Overall, Kubota's financial health is sound but requires attention to revenue growth and leverage management.
Income Statement
75
Positive
Kubota has demonstrated a stable revenue trajectory with a slight dip in 2024. The Gross Profit Margin improved slightly to 30.77% in 2024, indicating better cost management. The Net Profit Margin also remained strong at 7.64%. However, revenue growth was stagnant due to the slight decrease from the previous year. The EBIT and EBITDA margins were healthy, at 10.97% and 14.45% respectively, showcasing operational efficiency. Overall, profitability and operational efficiency are strengths, but stagnant revenue growth is a concern.
Balance Sheet
70
Positive
The Debt-to-Equity Ratio increased to 0.92, indicating a higher leverage but still within reasonable limits for the industry. The Return on Equity (ROE) was strong at 9.30%, reflecting effective use of equity to generate earnings. The Equity Ratio, at 41.15%, suggests a solid balance between debt and equity financing. The balance sheet reflects strength in equity but notes increased leverage, which could pose potential risks if not managed carefully.
Cash Flow
65
Positive
Kubota's free cash flow turned positive in 2024 to ¥68.09 billion, showing improvement in cash generation. The Operating Cash Flow to Net Income Ratio was robust at 1.22, indicating good cash conversion from earnings. The Free Cash Flow to Net Income Ratio improved significantly, indicating better cash management. However, prior periods showed volatility, suggesting potential risks in cash flow stability.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.95T3.02T3.02T2.68T2.20T1.85T
Gross Profit
908.08B927.98B876.47B696.52B631.81B534.85B
EBIT
284.07B330.97B328.83B218.94B246.21B175.28B
EBITDA
411.15B462.40B454.81B322.40B325.61B254.91B
Net Income Common Stockholders
198.86B230.44B238.46B156.47B174.76B128.52B
Balance SheetCash, Cash Equivalents and Short-Term Investments
210.17B295.13B305.14B297.31B309.51B272.89B
Total Assets
5.77T6.02T5.36T4.73T3.77T3.19T
Total Debt
2.18T2.28T1.99T1.61T1.09T874.44B
Net Debt
1.97T1.98T1.77T1.39T835.87B651.52B
Total Liabilities
3.12T3.28T2.94T2.65T1.99T1.62T
Stockholders Equity
2.40T2.48T2.18T1.88T1.68T1.48T
Cash FlowFree Cash Flow
110.61B68.09B-189.75B-177.33B-33.21B58.17B
Operating Cash Flow
285.21B282.08B-17.27B-7.68B92.51B142.92B
Investing Cash Flow
-201.70B-208.88B-173.44B-318.50B-127.37B-47.13B
Financing Cash Flow
-133.33B-26.28B178.40B282.56B60.59B-68.35B

Kubota Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1604.00
Price Trends
50DMA
1647.92
Negative
100DMA
1769.71
Negative
200DMA
1857.29
Negative
Market Momentum
MACD
-14.26
Negative
RSI
45.70
Neutral
STOCH
48.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6326, the sentiment is Negative. The current price of 1604 is below the 20-day moving average (MA) of 1618.23, below the 50-day MA of 1647.92, and below the 200-day MA of 1857.29, indicating a bearish trend. The MACD of -14.26 indicates Negative momentum. The RSI at 45.70 is Neutral, neither overbought nor oversold. The STOCH value of 48.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6326.

Kubota Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Outperform
$1.85T9.418.29%2.79%-2.02%-16.84%
66
Neutral
$4.50B12.295.40%248.66%4.13%-12.33%
$6.54B12.289.99%3.75%
DETN0
€745.11M14.754.46%2.37%
79
Outperform
¥4.13T9.44
4.25%5.97%13.78%
54
Neutral
¥32.83B
2.07%1.56%-720.36%
¥217.21B8.25
4.39%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:6326
Kubota
1,604.00
-561.10
-25.92%
HTCMF
Hitachi Construction Machinery Co
29.85
4.41
17.33%
DE:TN0
TADANO
5.90
-0.52
-8.10%
JP:6301
Komatsu Ltd.
4,478.00
16.77
0.38%
JP:6310
Iseki & Co., Ltd.
1,339.00
347.82
35.09%
JP:6432
Takeuchi Mfg.Co., Ltd.
4,515.00
-1,129.56
-20.01%

Kubota Corporate Events

Kubota Reports No Share Repurchase in May 2025
Jun 4, 2025

Kubota Corporation announced that no shares were repurchased during the specified period of May 2025, despite a board resolution allowing for the repurchase of up to 16 million shares. This decision reflects the company’s current strategic focus and may influence its financial positioning and shareholder relations.

The most recent analyst rating on (JP:6326) stock is a Hold with a Yen2300.00 price target. To see the full list of analyst forecasts on Kubota stock, see the JP:6326 Stock Forecast page.

Kubota Announces No Share Repurchases in April 2025
May 9, 2025

Kubota Corporation announced that it did not repurchase any of its own shares during the specified period from April 23 to April 30, 2025, despite having a board resolution authorizing the repurchase of up to 16 million shares or ¥20 billion worth of shares by December 15, 2025. The lack of repurchase activity may impact the company’s stock market strategy and shareholder value, as share buybacks are often used to return value to shareholders and adjust capital structure.

Kubota Announces Strategic Share Repurchase Plan
Apr 22, 2025

Kubota Corporation has announced a share repurchase plan to enhance shareholder value by buying back up to 16 million common shares, representing 1.4% of its total shares, for a maximum of ¥20 billion. This strategic move, set to occur between April 23 and December 15, 2025, aims to increase the value per share and return profits to shareholders, potentially strengthening Kubota’s market position and investor appeal.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.