Hitachi,Ltd. (6501) AI Stock Analysis

Compare

14 Followers

Top Page

Hitachi,Ltd.

(OTC:6501)

Rating:78Outperform

Price Target:

¥4,860.00

▲(13.71% Upside)

Hitachi's strong financial performance and positive earnings call sentiment are the primary drivers of its score. While technical indicators show positive momentum, the high P/E ratio suggests valuation concerns. The company's robust growth in key sectors and effective cash flow management support a favorable outlook.

Positive Factors

Cash Flow and Investment

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

Analysts forecast strong growth in adjusted EBITA margin, reaching 14.2% in FY3/28 from 10.8% in FY3/25.

Leadership and Strategy

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.

Profit Forecast

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

Share Performance

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

$19.52T

Dividend Yield1.01%

Average Volume (3M)12.55M

Price to Earnings (P/E)31.0

Beta (1Y)1.60

Revenue Growth2.21%

EPS Growth-7.98%

CountryJP

Employees268,655

SectorIndustrials

Sector Strength75

IndustryConglomerates

Share Statistics

EPS (TTM)42.01

Shares Outstanding4,581,561,000

10 Day Avg. Volume13,070,050

30 Day Avg. Volume12,550,343

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.00

Enterprise Value/Revenue2.00

Enterprise Value/Gross Profit6.94

Enterprise Value/Ebitda14.40

Forecast

1Y Price Target

$4,844.56

Price Target Upside13.35% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

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: -6.90%|

Next Earnings Date:Oct 24, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of strong performances in the Energy and Mobility sectors, contributing to record high adjusted EBITDA and significant free cash flow. However, challenges were noted in overseas operations and the impact of U.S. tariffs, particularly affecting the DSS segment and China business. The overall outlook remains cautious due to these uncertainties.

Q1-2025 Updates

Positive Updates

Record High Adjusted EBITDA

Hitachi's consolidated results showed increased revenues and profit, with adjusted EBITDA achieving a record high for Q1 FY 2025.

Significant Increase in Free Cash Flow

Core free cash flow increased significantly from the previous year to approximately JPY 350 billion, driven by the increase in adjusted EBITDA and improved working capital.

Strong Energy and Mobility Sectors

The Energy sector's power grid business and Mobility's railway systems performed well, driven by strong demand in transmission upgrades and renewable energy-related projects.

European Business Expansion

European business expanded by 17% year-on-year, with the Energy sector growing by 33% due to the power grids business.

Negative Updates

Overseas Operations Challenges

Overseas operations saw a decline in revenue and profit due to customers' investment restraints caused by the indirect impact of U.S. tariffs and intensified competition in the storage business.

Decline in China Business

China business declined by 16% due to a decline in new demand for elevators and escalators.

U.S. Tariffs Impact

The direct and indirect impact of U.S. tariffs amounted to a deterioration of JPY 2.5 billion in adjusted EBITDA for Q1, with a projected total deterioration risk of JPY 30 billion for the fiscal year.

Company Guidance

During Hitachi Limited's Q1 FY 2025 earnings call, the company reported a 5% year-on-year revenue growth, excluding foreign exchange effects, and an adjusted EBITDA margin increase of 0.4 percentage points to 10.5%. Net income attributable to parent company shareholders surpassed JPY 190 billion, and core free cash flow significantly rose to approximately JPY 350 billion. Despite the impact of U.S. tariffs, the energy power grids and mobility railway systems businesses performed strongly, driven by GX demand expansion. The fiscal year 2025 outlook anticipates a 6% revenue growth, excluding currency effects, although core free cash flow is expected to decrease due to a decline in advance payments. The company maintained its full-year forecast, considering the uncertainty in the business environment and potential M&A investments. The Energy sector saw a 20% revenue increase in Q1, while Mobility experienced growth due to acquisitions. However, the DSS segment faced a decline in overseas revenue due to investment restraints and intensified competition. Overall, Hitachi anticipates continued growth in key sectors despite tariff-related challenges.

Hitachi,Ltd. Financial Statement Overview

Summary

Hitachi exhibits a strong financial profile with consistent revenue growth, robust profitability margins, and effective cash flow management. The company maintains a low debt profile, ensuring financial stability and flexibility. While there is potential for optimizing liability management, the overall financial health supports a positive outlook for future growth.

Income Statement

Very Positive

Hitachi has demonstrated strong performance with consistent revenue growth, evidenced by a 0.56% increase from 2024 to 2025 and solid margins. The gross profit margin stands at 28.83%, and the net profit margin is 6.29%. The company maintains a stable EBIT margin of 9.93% and a robust EBITDA margin of 14.27% for 2025, reflecting efficient operational management and cost control.

Balance Sheet

Positive

The balance sheet remains strong with a debt-to-equity ratio of 0.21, indicating low leverage and sound financial management. Return on Equity (ROE) is impressive at 10.53%, highlighting effective use of equity. The equity ratio of 44.01% signifies a stable financial foundation, although there is room for improvement in reducing total liabilities.

Cash Flow

Very Positive

Hitachi's cash flow position is solid, with a free cash flow growth rate of 61.91% from 2024 to 2025. The operating cash flow to net income ratio is 1.90, and the free cash flow to net income ratio is 1.50, indicating strong cash generation relative to earnings, which supports future investments and debt servicing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.78T	9.78T	9.73T	10.88T	10.26T	8.73T
Gross Profit	2.82T	2.82T	2.58T	2.69T	2.56T	2.20T
EBITDA	1.36T	1.44T	1.35T	1.40T	1.41T	1.36T
Net Income	615.72B	615.72B	589.90B	649.12B	583.47B	501.61B
Balance Sheet
Total Assets	13.28T	13.28T	12.22T	12.50T	13.89T	11.85T
Cash, Cash Equivalents and Short-Term Investments	866.24B	866.24B	1.04T	1.18T	1.35T	1.34T
Total Debt	1.21T	1.21T	1.18T	2.21T	3.13T	2.40T
Total Liabilities	7.25T	7.25T	6.36T	7.17T	8.53T	7.39T
Stockholders Equity	5.85T	5.85T	5.70T	4.94T	4.34T	3.53T
Cash Flow
Free Cash Flow	925.39B	925.39B	571.47B	416.46B	290.08B	420.18B
Operating Cash Flow	1.17T	1.17T	956.61B	827.04B	729.94B	793.13B
Investing Cash Flow	-530.06B	-530.10B	-131.54B	151.06B	-1.05T	-458.84B
Financing Cash Flow	-467.71B	-467.68B	-1.02T	-1.14T	202.74B	-184.84B

Hitachi,Ltd. Technical Analysis

Technical Analysis Sentiment

Positive

Last Price4274.00

Price Trends

50DMA

4192.02

Positive

100DMA

3902.76

Positive

200DMA

3900.60

Positive

Market Momentum

MACD

11.35

Positive

RSI

50.48

Neutral

STOCH

50.30

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6501, the sentiment is Positive. The current price of 4274 is below the 20-day moving average (MA) of 4358.25, above the 50-day MA of 4192.02, and above the 200-day MA of 3900.60, indicating a neutral trend. The MACD of 11.35 indicates Positive momentum. The RSI at 50.48 is Neutral, neither overbought nor oversold. The STOCH value of 50.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6501.

Hitachi,Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (71)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8058	80 Outperform	$12.32T	15.75	8.85%	3.16%	-7.01%	-17.06%
8053	79 Outperform	¥4.87T	8.03	13.26%	3.23%	4.25%	59.51%
8031	79 Outperform	$9.34T	11.63	10.69%	3.06%	0.76%	-22.37%
8002	78 Outperform	$5.42T	10.42	14.30%	2.94%	8.52%	10.16%
6501	78 Outperform	$19.52T	30.96	10.93%	1.01%	2.21%	-7.98%
8001	77 Outperform	¥11.50T	11.88	17.06%	2.50%	2.83%	22.27%
Sector *	71 Outperform	¥267.71B	14.93	8.32%	2.79%	6.06%	11.03%

* Industrials Sector Average

Performance Comparison

JP:6501

Hitachi,Ltd.

4,274.00

756.89

21.52%

JP:8002

Marubeni

3,248.00

870.58

36.62%

JP:8053

Sumitomo

4,038.00

771.03

23.60%

JP:8031

Mitsui & Co

3,288.00

274.63

9.11%

JP:8058

Mitsubishi

3,203.00

280.54

9.60%

JP:8001

Itochu

7,992.00

1,036.85

14.91%

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.