DENSO (6902) AI Stock Analysis

• Market Cap: ¥5.18T
• Dividend Yield: 3.28%
• Average Volume (3M): 6.20M
• Price to Earnings (P/E): 13.4
• Beta (1Y): 1.29
• Revenue Growth: 0.24%
• EPS Growth: 37.64%
• Country: JP
• Employees: 162,029
• Sector: Consumer Cyclical
• Sector Strength: 57
• Industry: Auto - Parts
• EPS (TTM): 37.40
• Shares Outstanding: 2,910,979,700
• 10 Day Avg. Volume: 5,642,040
• 30 Day Avg. Volume: 6,196,616
• PEG Ratio: -2.26
• Price to Book (P/B): 1.10
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.37
• 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: ¥2,350.57
• Price Target Upside: 20.51% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 76 Outperform
• Price Target: ¥2,170.00 ▲(11.25%Upside)

The overall score reflects DENSO's strong financial performance and attractive valuation, despite mixed technical indicators. The company's robust financial health, characterized by consistent growth and effective cost management, is the most significant factor. The valuation suggests potential undervaluation, which is appealing in the current market context.

Positive Factors

Financial Performance

Denso commands industry-leading EBITDA margins of approximately 15%, above its peers at 10-14%.

Management Outlook

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

Negative Factors

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 manufacturing and sale of automotive components and systems to major automotive manufacturers worldwide. Its key revenue streams include the production of powertrain systems, which improve engine efficiency and reduce emissions; thermal systems, which focus on vehicle climate control; and electrification systems, which support the growing demand for electric and hybrid vehicles. Additionally, DENSO generates revenue from its mobility systems and industrial solutions, offering advanced technologies for automated driving and smart industrial equipment. Significant partnerships with leading automobile companies also contribute to its earnings, allowing DENSO to leverage shared expertise and expand its market presence.

DENSO Financial Statement Overview

Summary

DENSO is in a robust financial position, characterized by consistent revenue and profit growth, efficient operations, and a stable balance sheet. The company is well-positioned to leverage its strengths in the auto parts industry. While there are areas for improvement in leverage and cash flow stability, the overall financial health is strong.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
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: 1950.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• 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 1950.5 is above the 20-day moving average (MA) of 1926.40, above the 50-day MA of 1905.30, and below the 200-day MA of 2003.93, indicating a neutral trend. The MACD of 7.06 indicates Negative momentum. The RSI at 53.92 is Neutral, neither overbought nor oversold. The STOCH value of 73.61 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
6923	81 Outperform	$421.91B	13.75	6.26%	2.80%	7.87%	27.28%
5802	78 Outperform	¥2.43T	12.56	8.51%	2.65%	6.29%	29.42%
6902	76 Outperform	¥5.18T	13.39	7.87%	3.28%	0.24%	37.64%
7259	76 Outperform	¥1.34T	13.25	5.15%	3.25%	-0.27%	25.45%
7276	73 Outperform	¥533.37B	11.07	7.02%	3.25%	-3.53%	22.33%
3116	67 Neutral	$364.01B	20.80	3.66%	4.37%	0.03%	-69.96%
Sector *	56 Neutral	HK$23.68B	3.88	-1.57%	6.91%	0.06%	-64.88%

DENSO Corporate Events

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.

DENSO Highlights Relationship with Toyota and Operational Independence

DENSO Corporation announced its relationship with Toyota Motor Corporation, highlighting that Toyota holds a significant 21.26% of its voting rights. Despite this affiliation, DENSO maintains operational independence, conducting its own R&D, production, and sales activities. The company benefits from a stable customer base in the Toyota group, which accounts for 48.1% of its net sales, but also faces potential impacts on business results due to this dependency.

DENSO Corporation Reports Strong Financial Performance for Fiscal Year 2025

DENSO Corporation reported its consolidated financial results for the fiscal year ending March 31, 2025, showing a slight increase in revenue to 7,161,777 million yen. The company experienced significant growth in operating profit and profit before income taxes, with increases of 36.4% and 32.5% respectively. This performance reflects a robust recovery compared to the previous fiscal year, indicating a positive impact on DENSO’s operational efficiency and market positioning. The company also announced a cash dividend of 64 yen per share for the fiscal year, reflecting a commitment to returning value to shareholders.

DENSO Announces Progress in Share Repurchase Strategy

DENSO CORPORATION has announced the status of its treasury stock repurchase, acquiring 13,318,600 shares at a total cost of 26,214,742,250 yen during March 2025. This move is part of a larger strategy approved by the board to repurchase up to 280 million shares by October 2025, reflecting a significant investment in its own shares, which could impact shareholder value and market perception.