Nitto Denko (6988) AI Stock Analysis

• Market Cap: ¥2.21T
• Dividend Yield: 1.54%
• Average Volume (3M): 2.86M
• Price to Earnings (P/E): 17.4
• Beta (1Y): 1.13
• Revenue Growth: 1.84%
• EPS Growth: -6.57%
• Country: JP
• Employees: 25,300
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 54.57
• Shares Outstanding: 678,659,700
• 10 Day Avg. Volume: 2,953,770
• 30 Day Avg. Volume: 2,858,060
• PEG Ratio: 0.39
• Price to Book (P/B): 1.84
• Price to Sales (P/S): 1.89
• P/FCF Ratio: 17.17
• 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: ¥4,600.74
• Price Target Upside: 34.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: ¥3,825.00 ▲(11.65% Upside)

Strong underlying financial quality (high profitability and extremely low leverage) is the primary support for the score. This is tempered by weak technical signals (below key moving averages with negative MACD and low RSI) and a moderate valuation (P/E ~18.4 with a modest ~1.65% yield).

Positive Factors

High Profitability

Sustained high gross, EBIT and net margins point to persistent pricing power and efficient operations across product lines. This margin structure supports durable earnings generation, funds R&D and capex, and underpins the company’s ability to invest through cycles.

Conservative Balance Sheet

Extremely low leverage and a large equity base materially reduce financial distress risk, giving the company flexibility to pursue M&A, R&D, or weather downturns without refinancing pressure. This enhances long-term financial resilience and strategic optionality.

Diversified, high-value product portfolio

A broad product mix across advanced materials, tapes and medical products spreads end-market exposure and leverages engineering/R&D capabilities. Combined with partnerships in automotive and electronics, this diversification supports stable multi-industry demand and long-term growth.

Negative Factors

Uneven cash conversion

Operating cash flow trailing net income and free cash flow under half of net income indicate working-capital swings or heavy investment timing. This variability weakens free-cash-flow predictability, complicating capital allocation, dividends and long-term investment planning.

Margin variability / normalization risk

Observed margin compression between annual and TTM periods suggests profitability is sensitive to product mix and cycle effects. Persistent margin volatility can reduce forecasting accuracy and may limit sustained EPS growth absent steady pricing or mix improvements.

Exposure to cyclical end-markets

Significant revenue from automotive and electronics ties results to capital goods cycles and end-market demand swings. Even with diversified products and margins, cyclical downturns can materially affect volumes, working capital and near-term cash generation for months to quarters.

Nitto Denko Business Overview & Revenue Model

Company Description

Nitto Denko Corporation primarily engages in the adhesive tapes business in Japan and internationally. It provides double sided tapes, surface protective films, sealing materials/NVH related products, masking tapes, membranes, FPD/touch panel related products, gasket materials, semiconductor manufacturing process products, flexible printed circuit boards, porous films/breathable materials, and packaging tapes. The company also offers functional thermal transfer systems, such as labels, barcode label printers, and label printing software; tapes for electrical and electronic equipment; dust removal products for clean rooms; fluoroplastic sheets and tapes, and fluoroplastic porous films; and materials for housing and construction, as well as packaging machines. In addition, it provides medical products, including transdermal therapeutic systems, athletic tapes, medical adhesive tapes for wearable devices and body sensors, adhesive tapes, and particles for nucleic acid synthesis. The company offers its products to automotive and transportation, housing/housing equipment, infrastructure, material, home appliance and electrical, display, electronic device, medical, packaging, and consumer/personal care industries. Nitto Denko Corporation was incorporated in 1918 and is headquartered in Osaka, Japan.

How the Company Makes Money

Nitto Denko generates revenue through multiple streams, primarily by selling its advanced materials and specialty products to a variety of industries. Key revenue streams include the production of adhesive tapes and films, which are used extensively in automotive manufacturing and electronics assembly. The company also earns income from its medical products segment, where it supplies materials for medical devices and healthcare solutions. Significant partnerships with major corporations in the automotive and electronics sectors enhance its market position and contribute to stable revenue generation. Furthermore, Nitto Denko invests in research and development to innovate and expand its product offerings, ensuring ongoing demand and long-term profitability.

Nitto Denko Financial Statement Overview

Summary

Strong profitability (gross margin ~38%, EBIT ~17%, net ~13%) and robust TTM revenue growth, supported by operating leverage. Balance sheet is exceptionally conservative with minimal debt and healthy ROE (~12% TTM). Main drawback is uneven cash conversion (OCF ~0.84x net income; FCF ~0.46x net income TTM), indicating variability from working capital and/or investment needs.

Income Statement

TTM (Trailing-Twelve-Months) results show strong profitability with healthy gross margin (~38%), EBIT margin (~17%), and net margin (~13%). Revenue growth is robust in the TTM period, and profits remain solid, supported by strong operating leverage. The main offset is some margin normalization versus the most recent annual period (annual net margin ~13.5% vs. ~12.5% TTM), suggesting profitability can fluctuate with mix/cycle.

Balance Sheet

The balance sheet is exceptionally conservative: debt is minimal relative to equity (debt-to-equity near zero in both TTM and annual data), with a large equity base supporting assets. Returns on equity are healthy (~12% TTM; ~13% annual), indicating good capital efficiency despite the low leverage. The primary limitation is that low leverage can cap upside in strong cycles, but overall financial risk appears very low.

Cash Flow

Cash generation is solid, with positive operating cash flow and free cash flow in both TTM and annual periods, and strong TTM free cash flow growth. However, cash conversion is somewhat mixed: operating cash flow trails net income (about 0.84x in TTM), and free cash flow is less than half of net income in TTM (~0.46x), pointing to working-capital swings and/or higher investment needs. Annual cash conversion is stronger than TTM, but variability lowers the score.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.01T	915.14B	929.04B	853.45B	761.32B
Gross Profit	395.51B	330.86B	337.44B	302.39B	243.45B
EBITDA	254.16B	200.84B	205.01B	183.97B	142.34B
Net Income	137.24B	102.68B	109.17B	97.13B	70.23B
Balance Sheet
Total Assets	1.32T	1.25T	1.15T	1.09T	965.90B
Cash, Cash Equivalents and Short-Term Investments	363.34B	342.27B	329.97B	362.05B	302.29B
Total Debt	455.00M	30.46B	272.00M	241.00M	545.00M
Total Liabilities	276.80B	266.04B	250.45B	272.36B	249.22B
Stockholders Equity	1.04T	984.02B	902.21B	821.19B	715.87B
Cash Flow
Free Cash Flow	111.91B	87.75B	115.78B	85.53B	58.59B
Operating Cash Flow	217.91B	155.52B	181.70B	144.49B	116.31B
Investing Cash Flow	-115.11B	-67.93B	-159.91B	-57.59B	-57.54B
Financing Cash Flow	-78.89B	-90.78B	-57.63B	-36.64B	-68.30B

Nitto Denko Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3426.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6988, the sentiment is Negative. The current price of 3426 is below the 20-day moving average (MA) of 3641.50, below the 50-day MA of 3716.80, and above the 200-day MA of 3256.51, indicating a neutral trend. The MACD of -76.80 indicates Positive momentum. The RSI at 34.32 is Neutral, neither overbought nor oversold. The STOCH value of 15.28 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6988.

Nitto Denko Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4403	75 Outperform	¥703.92B	20.00	12.15%	1.58%	2.62%	2.81%
4612	75 Outperform	¥2.41T	14.72	10.44%	1.52%	9.81%	32.64%
6988	68 Neutral	¥2.21T	17.41	11.98%	1.54%	1.84%	-6.57%
5201	67 Neutral	¥1.21T	23.33	3.63%	3.98%	-1.17%	―
4183	64 Neutral	¥882.05B	47.71	2.02%	3.82%	-4.63%	-65.11%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4182	55 Neutral	¥594.20B	-80.57	-1.15%	3.49%	-6.83%	-123.67%

Nitto Denko Corporate Events

Nitto Denko Posts Slight Sales Rise but Profit Dip, Affirms Outlook and Dividend Plan

Nitto Denko reported modest revenue growth but lower profits for the nine months ended 31 December 2025, with sales up 1.0% year-on-year to ¥786.2 billion while operating profit fell 3.3% to ¥147.9 billion and net profit attributable to owners declined 2.7% to ¥105.7 billion, even as basic earnings per share edged up due to share count effects after a stock split. The company maintained a strong balance sheet with equity ratio above 80%, confirmed an unchanged full-year forecast calling for slight revenue and profit growth, and outlined dividends implying a total of ¥60 per share for the year to March 2026, signaling continued shareholder returns despite profit headwinds and a more moderate growth trajectory after last year’s strong rebound.

The most recent analyst rating on (JP:6988) stock is a Buy with a Yen4600.00 price target. To see the full list of analyst forecasts on Nitto Denko stock, see the JP:6988 Stock Forecast page.

Nitto Denko Taps Akagi as New President in Planned Leadership Transition

Nitto Denko has announced a leadership reshuffle in which current President and CEO Hideo Takasaki will become Chairman and Representative Director, while Executive Vice President Tatsuya Akagi, a long-time company insider who has led the Information Fine Materials Sector, will be promoted to Representative Director and President, COO, effective April 1, 2026. The transition is timed to coincide with the final year of the company’s current medium-term management plan, “Nitto for Everyone 2025,” and is intended to position Nitto Denko for its next medium-term plan starting in fiscal 2026, signaling a planned generational shift and continuity in strategy as the company pursues sustainable growth and further enhancement of corporate value.

The most recent analyst rating on (JP:6988) stock is a Buy with a Yen4231.00 price target. To see the full list of analyst forecasts on Nitto Denko stock, see the JP:6988 Stock Forecast page.

Nitto Denko Reports Decline in Semi-Annual Financial Results

Nitto Denko Corporation reported a decline in its financial performance for the six months ending September 30, 2025, with revenue and profits showing a decrease compared to the previous year. Despite the downturn, the company maintains a strong equity position with no significant changes in accounting policies or consolidation scope, and it has revised its forecast for the fiscal year ending March 31, 2026.

The most recent analyst rating on (JP:6988) stock is a Buy with a Yen4577.00 price target. To see the full list of analyst forecasts on Nitto Denko stock, see the JP:6988 Stock Forecast page.