DENSO (6902) AI Stock Analysis

• Market Cap: $5.61T
• Dividend Yield: 3.04%
• Average Volume (3M): 6.11M
• Price to Earnings (P/E): 14.9
• Beta (1Y): 1.28
• Revenue Growth: -0.33%
• EPS Growth: 29.09%
• Country: JP
• Employees: 162,029
• Sector: Consumer Cyclical
• Sector Strength: 73
• Industry: Auto - Parts
• EPS (TTM): 28.50
• Shares Outstanding: 2,910,979,700
• 10 Day Avg. Volume: 5,338,500
• 30 Day Avg. Volume: 6,105,949
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 0.74
• Enterprise Value/Gross Profit: 4.84
• Enterprise Value/Ebitda: 5.72
• 1Y Price Target: $2,249.89
• Price Target Upside: 6.98% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 78 Outperform
• Price Target: ¥2,401.00 ▲(14.17% Upside)

DENSO's solid financial performance is the primary driver of its overall stock score, supported by strong operational efficiency and revenue growth. The technical indicators suggest positive momentum, though caution is warranted due to the high RSI. Valuation metrics are fair, offering a balance of growth and income potential.

Positive Factors

Competitive Edge

Denso is a leading Tier 1 automobile component manufacturer with a competitive edge in xEV components.

Financial Performance

Management guided for FY3/26F EBIT margins of 9.6%, exceeding the consensus estimate of 8.9%.

Market Recommendation

Analyst maintains a BUY recommendation with an unchanged target price of ¥2,800.

Negative Factors

Cost Impact

4QFY25 results a miss on rising parts/material costs.

Market Demand

Slowing US/EU auto demand and depreciating USD/EUR against the JPY can pose downside risks to earnings, given Denso’s 35% revenue exposure to both markets.

Operational Challenges

The company's earnings were impacted by the suspension of operations by key Japanese customers due to quality-related issues.

DENSO Business Overview & Revenue Model

Company Description

DENSO Corporation develops, manufactures, and sells automotive parts in Japan, rest of Asia, North America, Europe, and internationally. It offers air-conditioning systems, including heat pump air-conditioning systems, control system and refrigerant products, air-conditioning system heat exchangers, bus air-conditioning systems, automotive freezers, and cooling products, as well as heating, ventilation, and air-conditioning units. The company also provides gasoline, diesel, hybrid, electric vehicle, and fuel cell vehicle power-train systems, as well as motor generators, power control units, and emission control components; and safety and cockpit systems, such as driving environment recognition, vehicle dynamic control, collision safety, visibility support, cockpit information, and information security systems, as well as other products. In addition, it offers automotive service parts and accessories comprising spark plugs, oil and cabin air filters, wiper blades, air filter elements, starters, alternators, compressors, oxygen sensors, fuel pumps, air conditioner service parts, radiators, condensers, Plasmacluster ion generators, air conditioners for busses and construction vehicles, driver status monitors, and truck refrigeration products, as well as refrigerant recovery, recycling, and charging machines; and repair and support products and services. Further, the company provides industrial solutions for factories in automotive parts production; agricultural solutions, including Profarm Controller, a climate control system for greenhouse; and household air conditioning equipment and industrial systems. DENSO Corporation was incorporated in 1949 and is based in Kariya, Japan.

How the Company Makes Money

DENSO makes money primarily through the design, manufacture, and sale of automotive components and systems to major automobile manufacturers worldwide. Its revenue model is heavily reliant on its position as a Tier 1 supplier to leading automakers, providing essential components such as engine management systems, air conditioning units, and various electronic and safety systems. Key revenue streams include its powertrain systems, which improve fuel efficiency and reduce emissions, and its thermal systems, which manage vehicle climate control. DENSO also generates income from its aftermarket services, offering repair and maintenance parts for vehicles. Significant partnerships with automotive giants, along with continuous investment in research and development for next-generation automotive technologies, further bolster its revenue. The company's commitment to innovation in areas like electrification, autonomous driving, and connectivity plays a crucial role in sustaining its competitive edge and profitability.

DENSO Financial Statement Overview

Summary

DENSO demonstrates strong financial performance with consistent revenue and profit growth, efficient operations, and a stable balance sheet. While leverage and cash flow stability could be improved, the overall financial health is robust.

Income Statement

DENSO exhibits strong revenue growth and improving profitability. The gross profit margin is healthy, and the net profit margin has shown consistent improvement over the years, indicating effective cost management. EBIT and EBITDA margins are also solid, suggesting robust operational efficiency.

Balance Sheet

The balance sheet is stable with a strong equity base, as evidenced by a solid equity ratio. The debt-to-equity ratio is manageable, reflecting prudent leverage. Return on equity has improved, demonstrating effective use of shareholders' funds, though there is room for further enhancement.

Cash Flow

DENSO's cash flow generation capabilities are strong, with increasing free cash flows. The operating cash flow to net income ratio indicates efficient cash conversion, and free cash flow growth is promising, although there was a slight decline in operating cash flows recently.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.16T	7.14T	6.40T	5.52T	4.94T
Gross Profit	1.10T	1.09T	911.14B	801.49B	661.49B
EBITDA	971.41B	846.45B	875.11B	765.38B	561.38B
Net Income	419.08B	312.79B	314.63B	263.90B	125.06B
Balance Sheet
Total Assets	8.13T	9.09T	7.41T	7.43T	6.77T
Cash, Cash Equivalents and Short-Term Investments	986.53B	789.39B	767.57B	885.54B	912.92B
Total Debt	699.38B	850.72B	889.27B	991.43B	854.22B
Total Liabilities	2.94T	3.35T	2.83T	2.94T	2.69T
Stockholders Equity	4.98T	5.53T	4.38T	4.30T	3.89T
Cash Flow
Free Cash Flow	378.67B	515.42B	188.41B	23.49B	2.55B
Operating Cash Flow	758.74B	961.83B	602.72B	395.64B	437.24B
Investing Cash Flow	121.90B	-459.49B	-363.68B	-301.58B	-395.90B
Financing Cash Flow	-677.43B	-496.66B	-400.10B	-159.54B	238.66B

DENSO Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2103.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6902, the sentiment is Positive. The current price of 2103 is above the 20-day moving average (MA) of 2069.85, above the 50-day MA of 1989.68, and above the 200-day MA of 1999.95, indicating a bullish trend. The MACD of 34.72 indicates Positive momentum. The RSI at 58.11 is Neutral, neither overbought nor oversold. The STOCH value of 63.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6902.

DENSO Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6902	78 Outperform	$5.61T	14.91	7.99%	3.04%	-0.33%	29.09%
Sector *	56 Neutral	HK$25.45B	5.07	-2.69%	5.60%	-0.43%	-53.15%
KOTMF	―	$4.26B	12.15	7.68%	2.40%	―	―
ASEKF	―	$11.31B	10.85	6.66%	6.42%	―	―
SMTOF	―	$21.47B	16.34	8.70%	―	―	―
STAEF	―	$2.94B	14.74	6.27%	2.72%	―	―
TDBOF	―	$2.97B	22.07	4.26%	3.60%	―	―

DENSO Corporate Events

DENSO Revises Full-Year Revenue Forecast Upwards

DENSO Corporation has revised its consolidated full-year financial results forecast for the fiscal year ending March 31, 2026, increasing its revenue projection by 2.13% to 7.2 trillion yen. This adjustment reflects the company’s first-quarter performance and anticipated sales growth due to tariff cost reflections from the second quarter onwards, while other financial metrics remain unchanged.

The most recent analyst rating on (JP:6902) stock is a Buy with a Yen2900.00 price target. To see the full list of analyst forecasts on DENSO stock, see the JP:6902 Stock Forecast page.

DENSO Announces Progress in Share Repurchase Program

DENSO Corporation announced the repurchase of 16,550,500 shares of its common stock at a total cost of 31,850,459,250 yen during June 2025. This move is part of a larger share repurchase program approved in October 2024, aiming to buy back up to 280 million shares by October 2025, indicating a strategic effort to enhance shareholder value and optimize capital structure.

The most recent analyst rating on (JP:6902) stock is a Buy with a Yen2800.00 price target. To see the full list of analyst forecasts on DENSO stock, see the JP:6902 Stock Forecast page.

DENSO Completes Disposal of Treasury Stock for Compensation

DENSO CORPORATION has completed the disposal of 267,679 shares of its treasury stock as restricted stock compensation, a move resolved by its Board of Directors on May 19, 2025. This disposal, valued at 514,479,038 yen, is aimed at compensating directors and senior executive officers, potentially impacting the company’s financial structuring and aligning the interests of its leadership with company performance.

The most recent analyst rating on (JP:6902) stock is a Buy with a Yen2800.00 price target. To see the full list of analyst forecasts on DENSO stock, see the JP:6902 Stock Forecast page.

DENSO Announces Share Repurchase Plan Linked to Toyota Industries Tender Offer

DENSO Corporation has announced its intention to repurchase its own shares through a tender offer, contingent on the successful completion of a related tender offer for Toyota Industries by Toyota Fudosan. This strategic move is expected to impact DENSO’s shareholding structure and could have implications for its market positioning and stakeholder interests.

The most recent analyst rating on (JP:6902) stock is a Buy with a Yen2800.00 price target. To see the full list of analyst forecasts on DENSO stock, see the JP:6902 Stock Forecast page.

DENSO to Participate in Toyota Industries Tender Offer, Anticipates Extraordinary Gains

DENSO CORPORATION has announced its decision to participate in a tender offer for its shares in Toyota Industries Corporation, aiming to maximize sale price and improve capital efficiency. The company expects to post significant extraordinary gains from this transaction in its non-consolidated results for the fiscal year ending March 31, 2026, while maintaining its business relationship with Toyota Industries.

The most recent analyst rating on (JP:6902) stock is a Buy with a Yen2800.00 price target. To see the full list of analyst forecasts on DENSO stock, see the JP:6902 Stock Forecast page.

DENSO Announces Progress in Treasury Stock Repurchase

DENSO CORPORATION has announced the status of its treasury stock repurchase, with 19,778,800 common shares repurchased at a total cost of 38,094,785,350 yen during May 2025. This move is part of a larger plan approved in October 2024 to repurchase up to 280 million shares, indicating a strategic effort to optimize capital structure and potentially enhance shareholder value.

The most recent analyst rating on (JP:6902) stock is a Buy with a Yen2800.00 price target. To see the full list of analyst forecasts on DENSO stock, see the JP:6902 Stock Forecast page.

DENSO Launches Employee Shareholding Incentive Plan

DENSO Corporation announced the implementation of an Employee Shareholding Association – Restricted Stock Incentive Plan, aimed at enhancing corporate value and stakeholder engagement by disposing of treasury stock to its Employee Shareholding Association. This initiative is designed to motivate employees and align their interests with the company’s long-term goals, potentially impacting employee engagement and asset-building efforts.

The most recent analyst rating on (JP:6902) stock is a Buy with a Yen2800.00 price target. To see the full list of analyst forecasts on DENSO stock, see the JP:6902 Stock Forecast page.

DENSO Announces Treasury Stock Disposal for Long-term Incentive Plan

DENSO CORPORATION has announced the disposal of 267,679 shares of its treasury stock as part of a restricted stock compensation plan aimed at providing medium- to long-term incentives to its directors and senior executive officers. This move is designed to align the interests of the company’s leadership with those of its shareholders by sharing shareholder value and enhancing motivation among eligible directors. The plan includes a 30-year transfer restriction period to ensure long-term commitment and value sharing.

The most recent analyst rating on (JP:6902) stock is a Buy with a Yen2800.00 price target. To see the full list of analyst forecasts on DENSO stock, see the JP:6902 Stock Forecast page.

DENSO Reports Extraordinary Gains from Investment Securities Sale

DENSO Corporation has announced the determination of extraordinary gains amounting to 105.8 billion JPY from the sale of investment securities. These gains will be reported in the non-consolidated financial results for the fiscal year ending March 31, 2026, with no impact on the consolidated results due to the adoption of International Financial Reporting Standards (IFRS).

The most recent analyst rating on (JP:6902) stock is a Buy with a Yen2800.00 price target. To see the full list of analyst forecasts on DENSO stock, see the JP:6902 Stock Forecast page.

DENSO to Sell Renesas Shares, Anticipates Financial Gains

DENSO Corporation has announced the sale of a portion of its investment in Renesas Electronics, expecting to post extraordinary gains in its non-consolidated financial results for the year ending March 31, 2026. This decision aligns with DENSO’s financial strategy to improve capital efficiency and reduce low-profit assets, while maintaining a collaborative relationship with Renesas to support its semiconductor strategy and business growth.

DENSO Reports Progress on Treasury Stock Repurchase

DENSO CORPORATION announced the status of its treasury stock repurchase, acquiring 27,941,200 shares at a cost of 48,647,041,950 yen during April 2025. This repurchase is part of a larger plan authorized in October 2024, allowing for the acquisition of up to 280 million shares by October 2025, indicating a strategic move to enhance shareholder value and optimize capital structure.