Murata Manufacturing Co (6981) AI Stock Analysis

• Market Cap: ¥7.50T
• Dividend Yield: 1.88%
• Average Volume (3M): 7.32M
• Price to Earnings (P/E): 39.9
• Beta (1Y): 1.27
• Revenue Growth: 2.88%
• EPS Growth: 28.76%
• Country: JP
• Employees: 72,572
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 13.91
• Shares Outstanding: 1,963,001,800
• 10 Day Avg. Volume: 5,682,650
• 30 Day Avg. Volume: 7,321,480
• PEG Ratio: 0.60
• Price to Book (P/B): 1.67
• Price to Sales (P/S): 2.47
• P/FCF Ratio: 15.16
• 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: ¥3,826.47
• Price Target Upside: -6.85% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 126.82
• Revenue Forecast (FY): ¥1.78T

• Rating: 74 Outperform
• Price Target: ¥4,530.00 ▲(10.27% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is driven primarily by strong financial performance, led by a very robust, low-leverage balance sheet and solid (though off-peak) profitability. Technicals are supportive but appear overbought, increasing near-term volatility risk. Valuation is the main headwind due to a high P/E and only modest dividend yield.

Positive Factors

Balance sheet strength

An exceptionally low debt-to-equity ratio (~2%–4%) gives Murata durable financial flexibility. It can sustain cyclical downturns, fund capex and R&D, secure long-term supply commitments, and pursue opportunistic investments or shareholder returns without stressing liquidity.

Sustained operating profitability

Healthy gross and EBITDA margins (~42% and ~25%) reflect structural advantages in manufacturing efficiency and product mix. These margins support long-term operating leverage, allow reinvestment into higher-margin modules and automotive qualifications, and underpin consistent cash generation.

Diversified product portfolio

Murata's broad portfolio across MLCCs, RF/connectivity modules, sensors and power parts spreads end-market exposure across consumer, automotive, industrial and infrastructure. This diversification reduces single-market concentration risk and benefits from secular trends like automotive electronic content and IoT rollout.

Negative Factors

Volatile free cash flow conversion

Free cash flow conversion at ~59%–61% of net income, with material volatility, signals that working capital, capex or restructuring can significantly swing cash available for buybacks or dividends. This weakens the predictability of capital returns and financial flexibility over cycles.

Modest revenue growth and EPS pressure

Low top-line growth (~3.5%) combined with negative EPS growth indicates limited organic momentum. Over a multi-month horizon this constrains operating leverage recovery, reduces headroom for margin expansion, and may reflect tougher competitive dynamics or cyclical demand headwinds in core end markets.

Normalized returns below prior peaks

ROE and margins now sit below 2021–2022 peaks, suggesting margin compression or a shift to lower‑margin product mix. Persistently lower returns could constrain long-term capital allocation outcomes and indicate structural competitive pressures or slower recovery in high-margin segments.

Murata Manufacturing Co Business Overview & Revenue Model

Company Description

Murata Manufacturing Co., Ltd. designs, manufactures, and sells ceramic-based passive electronic components and solutions in Japan and internationally. It operates through Components, Modules, and Others segments. The company offers capacitors, inductors, noise suppression products/EMI suppression filters/ESD protection devices, resistors, thermistors, sensors, timing devices, quartz devices, sound components, power products, batteries, micro mechatronics, RFID devices, matching devices, baluns, couplers, filters, phase shifters, RF switches, front-end modules, SAW components, connectors, antennas, connectivity modules, wireless connectivity platforms, ionizers/active oxygen modules, and transformers. It also provides mercury-free silver watch battery; and Femtet, a CAE software that solves various physical phenomena. The company offers its products for use in communications equipment, mobility, enterprise system, industrial, healthcare and medical, and personal electronics applications. Murata Manufacturing Co., Ltd. was founded in 1944 and is headquartered in Nagaokakyo, Japan.

How the Company Makes Money

Murata Manufacturing generates revenue through the sale of its extensive range of electronic components and modules. The company operates on a business model that emphasizes high-value, high-margin products, with a significant focus on research and development to create cutting-edge technology solutions. Key revenue streams include the sale of passive components, such as capacitors and inductors, which are essential for electronic circuits, as well as power management solutions and wireless communication modules used in smartphones and IoT devices. Additionally, Murata benefits from strategic partnerships with major technology firms and manufacturers, which enhance its market presence and drive sales. The company's ability to innovate and adapt to market demands, alongside its established relationships with industry leaders, significantly contributes to its earnings.

Murata Manufacturing Co Financial Statement Overview

Summary

Overall financials are strong: solid profitability (TTM gross margin ~42%, EBITDA margin ~25%) and an exceptionally low-leverage balance sheet (debt-to-equity ~2%–4%). The main constraint is cash-flow consistency—free cash flow conversion is only ~59%–61% of net income recently and has been volatile despite recent improvement.

Income Statement

TTM (Trailing-Twelve-Months) revenue is slightly higher than the latest annual period, suggesting a modest re-acceleration after prior year softness. Profitability remains solid for the industry, with TTM gross margin around 42% and EBITDA margin around 25%, supporting healthy operating leverage. However, margins are below the stronger levels seen in earlier years (notably 2021–2022), and the latest annual period shows a lower net margin than the TTM, indicating some near-term pressure on bottom-line efficiency.

Balance Sheet

The balance sheet is a clear strength: leverage is very low with debt-to-equity around 2%–4% in recent periods, and equity has grown over time, underpinning balance sheet resilience. Returns on equity are positive and fairly consistent (roughly 9%–10% recently), though below the peak levels achieved in 2021–2022, implying the company is operating with a more normalized return profile. Overall, the company appears well-positioned to absorb cyclical demand swings without balance sheet stress.

Cash Flow

Cash generation is generally healthy, with strong operating cash flow and positive free cash flow in the most recent annual period and TTM (Trailing-Twelve-Months). Cash flow quality is decent as operating cash flow exceeds operating profit (coverage above 1x), but free cash flow covers only ~59%–61% of net income recently, indicating meaningful reinvestment or working-capital/capex drag. Free cash flow growth is volatile (including a sharp decline in 2023 followed by rebounds), which tempers confidence in near-term consistency despite the improvement in the last two periods.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	1.78T	1.74T	1.64T	1.69T	1.81T	1.63T
Gross Profit	744.29B	683.20B	603.86B	641.76B	768.23B	622.20B
EBITDA	438.30B	480.61B	418.49B	473.47B	588.60B	459.88B
Net Income	189.84B	233.82B	180.84B	243.95B	314.12B	237.05B
Balance Sheet
Total Assets	3.09T	3.03T	3.04T	2.86T	2.81T	2.46T
Cash, Cash Equivalents and Short-Term Investments	582.20B	625.15B	622.01B	469.41B	568.44B	450.80B
Total Debt	108.66B	59.99B	105.94B	163.57B	142.98B	182.71B
Total Liabilities	477.97B	448.22B	482.29B	498.36B	545.26B	540.62B
Stockholders Equity	2.61T	2.58T	2.56T	2.36T	2.26T	1.92T
Cash Flow
Free Cash Flow	247.27B	284.18B	273.02B	93.47B	270.93B	173.69B
Operating Cash Flow	420.81B	467.12B	501.64B	283.38B	421.46B	373.57B
Investing Cash Flow	-179.06B	-223.96B	-214.34B	-157.82B	-212.30B	-150.28B
Financing Cash Flow	-221.03B	-242.06B	-164.56B	-181.60B	-117.50B	-118.19B

Murata Manufacturing Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4108.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6981, the sentiment is Positive. The current price of 4108 is above the 20-day moving average (MA) of 3528.50, above the 50-day MA of 3367.26, and above the 200-day MA of 2761.14, indicating a bullish trend. The MACD of 212.57 indicates Negative momentum. The RSI at 75.08 is Negative, neither overbought nor oversold. The STOCH value of 85.99 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6981.

Murata Manufacturing Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6806	78 Outperform	¥755.37B	25.94	8.09%	2.85%	11.18%	-0.75%
6981	74 Outperform	¥7.50T	39.89	8.95%	1.88%	2.88%	28.76%
6762	67 Neutral	¥4.43T	24.54	―	1.41%	7.73%	-1.93%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6996	60 Neutral	¥145.46B	52.89	―	2.18%	-0.93%	-45.03%
6976	56 Neutral	¥611.23B	88.44	―	2.57%	4.81%	-49.43%
6997	47 Neutral	¥45.87B	34.69	0.39%	―	-2.53%	-85.61%

Murata Manufacturing Co Corporate Events

Murata Lifts FY2026 Revenue Outlook on AI and Smartphone Demand but Trims Operating Profit

Murata Manufacturing has revised its full-year forecast for the fiscal year ending March 31, 2026, projecting higher revenue of ¥1.8 trillion, up 3.4% from its previous outlook, driven by yen depreciation and stronger demand for electronic components used in AI servers, peripheral equipment, and increased smartphone production. Despite the revenue upgrade and currency tailwinds, operating profit has been downgraded by 3.6% due to impairment losses on goodwill in its SAW filter-related business, leaving profit attributable to owners of the parent unchanged, a move that highlights both the growth momentum in AI- and smartphone-related demand and structural challenges in parts of its component portfolio; the company has also adjusted its assumed exchange rate to a weaker ¥150 per U.S. dollar for the final quarter.

The most recent analyst rating on (JP:6981) stock is a Buy with a Yen3600.00 price target. To see the full list of analyst forecasts on Murata Manufacturing Co stock, see the JP:6981 Stock Forecast page.

Murata Posts Higher Revenue but Weaker Profits and Trims Full-Year Earnings Outlook

Murata Manufacturing reported consolidated revenue of ¥1.37 trillion for the nine months ended December 31, 2025, a 2.9% year-on-year increase, but saw profitability decline, with operating profit down 13.3% to ¥203.0 billion and profit attributable to owners of parent falling 21.8% to ¥157.3 billion; basic earnings per share dropped to ¥85.68 from ¥107.56 a year earlier, even as total assets and equity edged up and the equity ratio remained a solid 84.6%. The company kept its dividend stance relatively stable, paying ¥30 per share at the second quarter and forecasting a full-year dividend of ¥60, while revising its full-year FY2025 (ending March 31, 2026) outlook to modest top-line growth of 3.2% to ¥1.8 trillion but lower profits, including a 3.5% decline in operating profit and a 5.9% drop in net profit, signaling margin pressure despite resilient revenues and underscoring a more cautious earnings environment for stakeholders.

The most recent analyst rating on (JP:6981) stock is a Buy with a Yen3600.00 price target. To see the full list of analyst forecasts on Murata Manufacturing Co stock, see the JP:6981 Stock Forecast page.

Murata Manufacturing Co. Strengthens Position in Expanding Electronics Market

Murata Manufacturing Co., Ltd. is strategically positioning itself to capitalize on the rapid changes in the electronics market driven by AI. By strengthening its core product offerings and implementing sustainable practices, the company aims to create a cycle of social and economic value, thereby improving profitability and customer satisfaction. Additionally, Murata is reinforcing its organizational, human, and financial capital to establish a strong management foundation, ensuring its growth and success in the expanding market.

The most recent analyst rating on (JP:6981) stock is a Hold with a Yen3260.00 price target. To see the full list of analyst forecasts on Murata Manufacturing Co stock, see the JP:6981 Stock Forecast page.