Hitachi,Ltd. (6501) AI Stock Analysis

Compare

14 Followers

Top Page

Hitachi,Ltd.

(OTC:6501)

Rating:68Neutral

Price Target:

¥4,174.00

▲(4.98% Upside)

Hitachi, Ltd. demonstrates strong financial performance with robust revenue growth and efficient cash flow management, which significantly boosts its overall score. However, technical analysis indicates bearish momentum, and the valuation suggests potential overvaluation, which weigh down the score. The earnings call provides a slightly positive outlook, driven by strong sector performances, despite some challenges.

Positive Factors

Cash Flow

The company is expected to have a robust increase in core free cash flow during FY3/26-28, indicating strong cash generation capabilities.

Financial Performance

The forecast for sales in Hitachi's three business domains shows an annual growth of 8%, indicating strong future performance.

Leadership

The new CEO is expected to reveal a constructive business strategy that demonstrates Hitachi's competitiveness against overseas peers.

Negative Factors

Market Reaction

The market had a tepid response to the nomination of the new CEO, suggesting that Hitachi needs to provide a constructive medium-term profit outlook to attract investors.

Profitability Targets

Management's conservatism in its operating margin targets for Digital Systems & Services and Green Energy & Mobility may lead to missing the consensus forecast.

Share Price

Hitachi's share price dropped after the nomination of the new CEO was revealed ahead of the official release.

Hitachi,Ltd. (6501) vs. iShares MSCI Japan ETF (EWJ)

Market Cap

¥17.96T

Dividend Yield1.08%

Average Volume (3M)11.93M

Price to Earnings (P/E)28.5

Beta (1Y)1.62

Revenue Growth2.21%

EPS Growth-7.98%

CountryJP

Employees268,655

SectorIndustrials

Sector Strength73

IndustryConglomerates

Share Statistics

EPS (TTM)42.01

Shares Outstanding4,581,561,000

10 Day Avg. Volume10,907,680

30 Day Avg. Volume11,925,673

Financial Highlights & Ratios

PEG Ratio4.72

Price to Book (P/B)2.72

Price to Sales (P/S)1.63

P/FCF Ratio17.19

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

¥4,800.29

Price Target Upside20.73% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

Hitachi,Ltd. Business Overview & Revenue Model

Company DescriptionHitachi, Ltd. (6501) is a diversified multinational conglomerate headquartered in Tokyo, Japan. The company operates across various sectors including Information Technology (IT) services, Social Infrastructure, High Functional Materials & Components, Automotive Systems, and Construction Machinery. Hitachi is renowned for its innovative solutions and products that range from advanced IT systems and digital services to energy-efficient infrastructure and consumer electronics. The company's core commitment lies in creating sustainable and efficient solutions that contribute to society and improve the quality of life globally.

How the Company Makes MoneyHitachi, Ltd. generates revenue through a wide array of business units, each contributing to its diversified income streams. The company's IT Services and Solutions division is a significant revenue driver, where it provides system integration, consulting, and outsourcing services. Social Infrastructure and Industrial Systems is another key segment, offering products and services in energy, railways, and urban planning. The High Functional Materials & Components sector contributes through the sale of materials and components used in electronics, automotive, and industrial applications. Additionally, Hitachi's Automotive Systems division supplies advanced automotive components and systems. The Construction Machinery segment, which involves the manufacture and sale of construction and mining equipment, also adds to the revenue. Strategic partnerships and joint ventures, especially in areas like digital transformation and smart infrastructure, further bolster Hitachi's earning potential. These diversified operations ensure a balanced revenue model, reducing dependency on any single market or product.

Hitachi,Ltd. Earnings Call Summary

Earnings Call Date:Jul 31, 2025

(Q1-2025)

% Change Since: |

Next Earnings Date:Oct 24, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with strong performances in the energy and mobility sectors, leading to record high adjusted EBITDA and free cash flow. However, the company faced challenges in the China market and overseas DSS operations, largely due to U.S. tariffs and intensified competition. Despite these challenges, the overall sentiment leans slightly positive due to strong growth in key sectors and a robust Lumada business performance.

Q1-2025 Updates

Positive Updates

Record High Adjusted EBITDA and Free Cash Flow

Hitachi achieved a record high in both adjusted EBITDA and core free cash flow in Q1 FY 2025, driven by strong performance in energy and mobility sectors.

Revenue Growth in Energy and Mobility Segments

The energy power grids business and mobility railways systems business performed well, leading to a 5% year-on-year revenue growth, excluding foreign exchange effects.

Strong Performance in Europe

European business expanded by 17% year-on-year, with significant growth in the Energy and Mobility sectors.

Upward Revision in Energy and Mobility Forecasts

Due to strong demand and improved profit margins, forecasts for the full year have been revised upward for both the Energy and Mobility sectors.

Lumada Business Growth

Lumada business revenues increased by 54% year-on-year, contributing significantly to Hitachi's overall performance.

Negative Updates

Decline in China Business

The China business declined by 16% due to reduced demand for elevators and escalators.

Challenges in DSS Overseas Operations

Overseas operations in the DSS segment saw a decline in revenue and profit due to indirect impacts of U.S. tariffs and intensified competition in the storage business.

Impact of U.S. Tariffs

The U.S. tariffs led to a JPY 2.5 billion deterioration in adjusted EBITDA for Q1, with an anticipated total impact of JPY 30 billion for the full year.

CI Segment Decline

The CI segment saw a decline in revenues and adjusted EBITDA due to reduced performance in the elevator and escalator business in China.

Company Guidance

In the recent conference call, Hitachi Limited provided comprehensive guidance on its first quarter fiscal year 2025 performance. The company reported a 5% year-on-year increase in revenues, excluding foreign exchange effects, with adjusted EBITDA reaching a record high and an improved margin of 10.5%. Net income attributable to shareholders surpassed JPY 190 billion, and core free cash flow significantly increased to approximately JPY 350 billion. Despite the adverse impacts of U.S. tariffs, the energy and mobility sectors showed robust growth, prompting upward revisions in fiscal year forecasts for these segments. The company anticipates a 6% increase in revenues for the full fiscal year, excluding currency effects, driven by ongoing demand for GX and strategic investments, though core free cash flow is expected to decrease due to a decline in advance payments. Hitachi also maintained its revenue and adjusted EBITDA projections despite the uncertain business environment, incorporating a total deterioration risk of JPY 30 billion related to tariffs into its full-year outlook. The company emphasized the strong performance of its Lumada business, which accounted for 41% of consolidated revenues after a 54% year-on-year increase in the first quarter, and highlighted ongoing strategic investments and M&A opportunities, particularly in North America.

Hitachi,Ltd. Financial Statement Overview

Summary

Hitachi, Ltd. presents a strong financial profile with robust revenue growth, solid profitability, and efficient cash flow management. The company's improved leverage and stable return on equity enhance its financial stability. Continued focus on maintaining low debt levels and capitalizing on growth opportunities will be key to sustaining its positive financial trajectory.

Income Statement

Very Positive

Hitachi, Ltd. demonstrates strong revenue growth with a TTM increase of 47.9%, indicating robust market demand and expansion. The gross profit margin of 28.8% and net profit margin of 6.3% reflect solid profitability. EBIT and EBITDA margins are healthy at 9.5% and 13.9%, respectively, showcasing efficient operations. The consistent revenue growth trajectory over recent periods underscores a positive outlook.

Balance Sheet

Positive

The company's debt-to-equity ratio has improved significantly to 0.21, indicating a strong balance sheet with reduced leverage. Return on equity is stable at 10.6%, reflecting effective use of equity to generate profits. The equity ratio of 43.1% suggests a solid capital structure, though the company should continue to monitor debt levels to maintain financial stability.

Cash Flow

Very Positive

Hitachi, Ltd. shows impressive free cash flow growth of 30.2% TTM, highlighting strong cash generation capabilities. The operating cash flow to net income ratio of 0.20 indicates efficient conversion of earnings into cash. The free cash flow to net income ratio of 0.79 is robust, suggesting effective cash management and potential for reinvestment or shareholder returns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.83T	9.78T	9.73T	10.88T	10.26T	8.73T
Gross Profit	2.84T	2.82T	2.58T	2.69T	2.56T	2.20T
EBITDA	1.44T	1.44T	1.35T	1.34T	1.37T	1.32T
Net Income	632.60B	615.72B	589.90B	649.12B	583.47B	501.61B
Balance Sheet
Total Assets	13.49T	13.28T	12.22T	12.50T	13.89T	11.85T
Cash, Cash Equivalents and Short-Term Investments	1.24T	1.18T	1.04T	1.18T	1.35T	1.34T
Total Debt	1.41T	1.21T	1.18T	2.21T	3.13T	2.40T
Total Liabilities	7.51T	7.25T	6.36T	7.17T	8.53T	7.39T
Stockholders Equity	5.82T	5.85T	5.70T	4.94T	4.34T	3.53T
Cash Flow
Free Cash Flow	1.20T	925.39B	571.47B	416.46B	290.08B	420.18B
Operating Cash Flow	1.47T	1.17T	956.61B	827.04B	729.94B	793.13B
Investing Cash Flow	-369.58B	-530.10B	-131.54B	151.06B	-1.05T	-458.84B
Financing Cash Flow	-652.62B	-467.68B	-1.02T	-1.14T	202.74B	-184.84B

Hitachi,Ltd. Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price3976.00

Price Trends

50DMA

4186.92

Negative

100DMA

4020.89

Negative

200DMA

3910.51

Positive

Market Momentum

MACD

-87.94

Positive

RSI

43.10

Neutral

STOCH

37.82

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6501, the sentiment is Neutral. The current price of 3976 is below the 20-day moving average (MA) of 4073.65, below the 50-day MA of 4186.92, and above the 200-day MA of 3910.51, indicating a neutral trend. The MACD of -87.94 indicates Positive momentum. The RSI at 43.10 is Neutral, neither overbought nor oversold. The STOCH value of 37.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:6501.

Hitachi,Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6501	68 Neutral	¥17.96T	28.48	10.93%	1.08%	2.21%	-7.98%
Sector *	63 Neutral	$10.73B	15.32	7.39%	2.01%	2.86%	-14.57%
ITOCF	―	$84.22B	13.05	17.06%	2.29%	―	―
MARUF	―	$39.45B	11.52	14.30%	2.61%	―	―
MITSF	―	$72.00B	13.56	10.69%	2.69%	―	―
MSBHF	―	$88.67B	17.36	8.85%	2.82%	―	―
SSUMF	―	$35.87B	8.91	13.26%	2.97%	―	―

* Industrials Sector Average

Performance Comparison

JP:6501

Hitachi,Ltd.

3,976.00

706.57

21.61%

ITOCF

Itochu

59.71

9.46

18.83%

MARUF

Marubeni

24.20

9.00

59.21%

MITSF

Mitsui & Co

25.10

5.88

30.59%

MSBHF

Mitsubishi

23.94

4.51

23.21%

SSUMF

Sumitomo

28.58

6.79

31.16%

Hitachi,Ltd. Corporate Events

Hitachi Announces Significant Share Repurchase Plan

Aug 4, 2025

Hitachi, Ltd. announced the repurchase of over 10 million shares of its common stock, amounting to approximately 42.6 billion yen, as part of a broader strategy approved by its Board of Directors to repurchase up to 140 million shares. This move is part of Hitachi’s ongoing efforts to optimize its capital structure and potentially enhance shareholder value, reflecting the company’s strategic financial management and commitment to its investors.

The most recent analyst rating on (JP:6501) stock is a Buy with a Yen4600.00 price target. To see the full list of analyst forecasts on Hitachi,Ltd. stock, see the JP:6501 Stock Forecast page.

Hitachi Reports Strong Q1 Financial Performance for Fiscal 2025

Jul 31, 2025

Hitachi, Ltd. reported its consolidated financial results for the first quarter of fiscal 2025, showing a steady increase in revenues and net income compared to the same period last year. The company achieved a 7% rise in adjusted operating income and a 10% increase in net income attributable to stockholders, reflecting strong operational performance. Despite a decrease in comprehensive income due to foreign currency translation adjustments, the overall financial health of the company remains robust, indicating positive implications for stakeholders.

The most recent analyst rating on (JP:6501) stock is a Buy with a Yen4000.00 price target. To see the full list of analyst forecasts on Hitachi,Ltd. stock, see the JP:6501 Stock Forecast page.

Hitachi Unveils Investor Day 2025 Materials

Jun 10, 2025

Hitachi, Ltd. announced the release of presentation materials for its upcoming ‘Hitachi Investor Day 2025,’ focusing on its Connective Industries Business Strategy. This disclosure is part of Hitachi’s efforts to engage stakeholders and provide insights into its strategic direction, potentially impacting its market positioning and operational focus.