Daikin (6367) AI Stock Analysis

• Market Cap: ¥5.83T
• Dividend Yield: 1.52%
• Average Volume (3M): 1.07M
• Price to Earnings (P/E): 21.3
• Beta (1Y): 0.97
• Revenue Growth: 1.60%
• EPS Growth: 5.80%
• Country: JP
• Employees: 98,162
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 117.61
• Shares Outstanding: 293,113,980
• 10 Day Avg. Volume: 1,075,890
• 30 Day Avg. Volume: 1,073,716
• PEG Ratio: 10.15
• Price to Book (P/B): 1.68
• Price to Sales (P/S): 0.99
• P/FCF Ratio: 17.60
• 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: ¥22,600.00
• Price Target Upside: 13.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 934.58
• Revenue Forecast (FY): ¥4.89T

• Rating: 66 Neutral
• Price Target: ¥21,508.00 ▲(8.00% Upside)
• Action: Reiterated Date: 02/06/26
• Date: Action: Reiterated 02/06/26

The score is primarily supported by strong financial fundamentals (durable margins and improving leverage), but is held back by volatile/weaker recent free cash flow and a clearly bearish technical setup (price below key moving averages with negative MACD). Valuation is neutral-to-modestly supportive (P/E ~20.7, 1.6% yield).

Positive Factors

Strong gross and operating margins

Sustained gross margin near 34% and an ~8.8% operating margin indicate durable product-level profitability and pricing power across HVAC and related products. This margin base supports reinvestment in R&D, product quality, and service networks, helping the business withstand demand cycles and protect long-term cash generation.

Conservative, improving leverage

Lower and improving leverage provides financial flexibility to fund capex, working capital, and strategic initiatives without stressing interest coverage. A conservative balance sheet reduces bankruptcy risk in downturns and supports steady capital allocation (dividends, M&A, or buybacks) over multiple cycles.

Diversified HVAC and chemicals business model

A mix of residential, commercial HVAC sales, recurring aftermarket services, and fluorochemical products diversifies revenue drivers and dampens cyclical volatility. Exposure to electrification, efficiency trends, and refrigerant regulation creates structural demand for heat pumps, compliant refrigerants, and lifecycle services over the medium term.

Negative Factors

Volatile free cash flow

Large swings and a recent sharp FCF decline weaken predictable cash available for investment and returns. Inconsistent cash conversion complicates capital planning, may constrain shareholder distributions or opportunistic spending, and makes the company more sensitive to working-capital and capex timing over coming quarters.

Returns below recent peak levels

A decline in ROE versus prior years suggests either margin pressure or less efficient capital use. Persistently lower return generation can limit reinvestment capacity and shareholder value creation, requiring operational improvements or strategic shifts to restore longer-term profitability trends.

Modest revenue growth; limited margin expansion

Low single-digit top-line growth combined with stagnant margins implies constrained organic expansion and limited operating leverage. Over a multi-quarter horizon this may cap earnings growth, reduce the cushion for cyclicality in construction markets, and necessitate productivity or product-mix improvements to drive durable EPS gains.

Daikin Business Overview & Revenue Model

Company Description

Daikin Industries, Ltd. manufactures, distributes, and sells air-conditioning and refrigeration equipment, and chemical products. The company's air-conditioning and refrigeration equipment products include room air-conditioning systems; air purifiers; heat-pump hot-water supply and room-heating systems; packaged air-conditioning systems; multiple air-conditioning systems for office buildings; air-conditioning systems for facilities and plants; absorption refrigerators; freezers; water chillers; turbo refrigerator equipment; air-handling units; air filters; industrial dust collectors; marine-type container refrigeration; and refrigerating and freezing showcases. The company's chemical products comprising fluorocarbons, fluoroplastics, fluoroelastomers, fluoropaints, fluoro coating agents, semiconductor-etching products, water and oil repellent agents, pharmaceuticals and intermediates, and dry air suppliers. It also provides oil hydraulics products, including oil hydraulic pumps and valves, cooling equipment and systems, inverter-controlled pump motors, hydrostatic transmissions, and centralized lubrication units and systems; and defense products consisting of warheads, warhead parts for guided missiles, and home-use oxygen therapy equipment. In addition, the company offers after sales services. It sells its products in Japan, the United States, China, Asia, Oceania, Europe /the Middle and Near East/Africa, and internationally. Daikin Industries, Ltd. was founded in 1924 and is headquartered in Osaka, Japan.

How the Company Makes Money

Daikin generates revenue primarily through the sale of its HVAC systems and equipment, which includes residential air conditioners, commercial air conditioning units, and industrial chillers. The company also earns income from service and maintenance contracts associated with its products. Key revenue streams include direct sales to consumers, partnerships with distributors and contractors, and providing installation services. Additionally, Daikin benefits from recurring revenue through the sale of replacement parts and refrigerants. Strategic partnerships with construction firms and real estate developers also enhance its market reach and contribute significantly to its earnings.

Daikin Financial Statement Overview

Summary

Solid profitability and stability: TTM revenue growth is positive (+1.8%), gross margin is strong (~33.8%), and operating margin is healthy (~8.8%). Balance sheet leverage is improving (debt-to-equity ~0.30) with steady ROE (~9.6%). The main drag is cash-flow quality/volatility: free cash flow fell sharply in TTM (~-41%) and has been inconsistent (including negative FCF in 2023).

Income Statement

TTM (Trailing-Twelve-Months) revenue is growing (+1.8%), extending a multi-year expansion after a small decline in 2021. Profitability remains solid with ~33.8% gross margin and ~8.8% operating margin in TTM, though net margin is modest (~5.7%) and has drifted down versus 2022–2023 levels. Overall, the income profile is resilient and consistently profitable, but margin expansion is not evident recently.

Balance Sheet

Leverage looks conservative-to-moderate with debt-to-equity improving to ~0.30 in TTM (down from ~0.37–0.45 in prior years), supported by a growing equity base. Returns on equity are steady around ~9.6% in TTM (below the ~11–12% seen in 2022–2023), suggesting profitability is healthy but not accelerating. Overall balance sheet strength is a key positive, with the main watch-out being slightly lower return generation versus peak years.

Cash Flow

Cash generation is positive in TTM (operating cash flow ~433B; free cash flow ~231B), and free cash flow covers a meaningful portion of earnings (~53%). However, free cash flow declined sharply in TTM (about -41% growth), and cash conversion is not consistently strong across the period (including negative free cash flow in 2023). This points to higher volatility in cash outcomes versus relatively steady reported profits.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	4.83T	4.75T	4.40T	3.98T	3.11T	2.49T
Gross Profit	1.63T	1.58T	1.51T	1.33T	1.06T	864.14B
EBITDA	689.04B	665.14B	645.76B	575.90B	484.94B	372.22B
Net Income	273.42B	264.76B	260.31B	257.75B	217.71B	156.25B
Balance Sheet
Total Assets	5.67T	5.13T	4.88T	4.30T	3.82T	3.24T
Cash, Cash Equivalents and Short-Term Investments	985.71B	802.66B	737.96B	617.66B	817.62B	736.10B
Total Debt	947.99B	1.03T	968.18B	887.63B	824.81B	751.21B
Total Liabilities	2.45T	2.27T	2.19T	2.02T	1.82T	1.54T
Stockholders Equity	3.15T	2.81T	2.64T	2.24T	1.97T	1.67T
Cash Flow
Free Cash Flow	230.63B	268.46B	156.93B	-16.18B	130.97B	269.72B
Operating Cash Flow	433.47B	514.45B	399.57B	158.90B	245.07B	374.69B
Investing Cash Flow	-341.99B	-322.29B	-226.72B	-229.79B	-180.79B	-159.67B
Financing Cash Flow	-149.74B	-168.58B	-129.62B	-113.09B	-48.70B	98.94B

Daikin Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19915.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6367, the sentiment is Positive. The current price of 19915 is above the 20-day moving average (MA) of 19432.75, above the 50-day MA of 19581.50, and above the 200-day MA of 18449.31, indicating a bullish trend. The MACD of 211.64 indicates Negative momentum. The RSI at 53.84 is Neutral, neither overbought nor oversold. The STOCH value of 40.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6367.

Daikin Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1969	79 Outperform	¥727.12B	16.31	―	2.13%	15.98%	82.99%
1979	76 Outperform	¥245.18B	18.03	8.53%	2.45%	5.14%	-10.92%
5332	67 Neutral	¥971.34B	205.69	0.83%	2.36%	-0.03%	-89.02%
5943	67 Neutral	¥106.46B	33.11	2.01%	3.57%	2.69%	1.74%
6367	66 Neutral	¥5.83T	21.33	9.46%	1.52%	1.60%	5.80%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5938	50 Neutral	$527.50B	55.39	1.44%	4.80%	0.68%	―

Daikin Corporate Events

Daikin Lifts Full-Year Forecast as Nine-Month Profit Rises and Portfolio Is Reorganized

Daikin reported consolidated net sales of ¥3.67 trillion for the nine months ended December 31, 2025, up 2.0% year-on-year, while operating profit slipped 3.4% to ¥307.9 billion and profit attributable to owners of parent rose 4.6% to ¥195.4 billion, lifting earnings per share to ¥667.22. The group strengthened its balance sheet with total assets rising to ¥5.67 trillion and an equity ratio of 55.5%, maintained its full-year dividend forecast at ¥330 per share despite a lower interim dividend versus the prior year, and raised its consolidated business forecast for the year to March 31, 2026 to ¥4.92 trillion in net sales and ¥268 billion in profit attributable to owners, while implementing portfolio changes that added seven subsidiaries, including Dynamic Data Centers Solutions, Inc., and removed 34, including Goodman Global Holdings, Inc., signaling ongoing business reorganization and potential realignment of its global operations.

The most recent analyst rating on (JP:6367) stock is a Hold with a Yen20000.00 price target. To see the full list of analyst forecasts on Daikin stock, see the JP:6367 Stock Forecast page.