Nitto Denko (6988) AI Stock Analysis

• Market Cap: ¥2.45T
• Dividend Yield: 1.54%
• Average Volume (3M): 2.86M
• Price to Earnings (P/E): 20.5
• 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): 55.64
• 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: ¥4,122.34
• Price Target Upside: 9.55% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: ¥4,231.00 ▲(12.44% Upside)

Nitto Denko's strong financial performance and positive technical indicators drive the overall score. The robust balance sheet and profitability are key strengths, while the valuation is fair. Technical analysis suggests a positive trend, though caution is warranted due to potential overbought conditions.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage enhances financial stability, allowing the company to invest in growth opportunities without excessive risk.

Profitability

High profitability margins indicate efficient operations and pricing power, supporting long-term financial health and competitive advantage.

Strategic Partnerships

The evaluation agreement with Codexis may lead to innovative product offerings, enhancing Nitto Denko's competitive position in the market.

Negative Factors

Declining Revenue Growth

A decline in revenue growth suggests potential challenges in market expansion or product demand, which could impact long-term growth prospects.

Cash Flow Management

Declining free cash flow growth may limit the company's ability to fund new projects or return capital to shareholders, affecting future financial flexibility.

EPS Decline

A decline in EPS growth can indicate reduced profitability per share, potentially impacting investor confidence and future earnings potential.

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

Nitto Denko demonstrates strong profitability with robust EBIT and EBITDA margins, and a solid balance sheet with low leverage. However, challenges in revenue growth and declining free cash flow growth are concerns.

Income Statement

Nitto Denko's income statement shows strong profitability with a consistent gross profit margin around 38% and a net profit margin of approximately 13% in the TTM period. However, the revenue growth rate has declined by 30.8% in the TTM, indicating potential challenges in maintaining sales momentum. Despite this, EBIT and EBITDA margins remain robust, reflecting efficient cost management.

Balance Sheet

The balance sheet is solid with a very low debt-to-equity ratio, indicating minimal leverage and financial risk. The return on equity is healthy at around 12.8%, showcasing effective use of equity to generate profits. The equity ratio is strong, suggesting a stable financial structure with a significant portion of assets financed by equity.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 19.75% in the TTM, which could be a concern for future investments or debt repayments. However, the operating cash flow to net income ratio is close to 1, indicating good cash generation relative to net income. The free cash flow to net income ratio is moderate, suggesting reasonable cash flow efficiency.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.01T	1.01T	915.14B	929.04B	853.45B	761.32B
Gross Profit	383.63B	395.51B	330.86B	337.44B	302.39B	243.45B
EBITDA	239.70B	254.16B	200.84B	205.01B	183.97B	142.34B
Net Income	126.19B	137.24B	102.68B	109.17B	97.13B	70.23B
Balance Sheet
Total Assets	1.33T	1.32T	1.25T	1.15T	1.09T	965.90B
Cash, Cash Equivalents and Short-Term Investments	303.19B	363.34B	342.27B	329.97B	362.05B	302.29B
Total Debt	2.77B	455.00M	30.46B	272.00M	241.00M	545.00M
Total Liabilities	277.77B	276.80B	266.04B	250.45B	272.36B	249.22B
Stockholders Equity	1.05T	1.04T	984.02B	902.21B	821.19B	715.87B
Cash Flow
Free Cash Flow	86.12B	111.91B	87.75B	115.78B	85.53B	58.59B
Operating Cash Flow	186.42B	217.91B	155.52B	181.70B	144.49B	116.31B
Investing Cash Flow	-104.13B	-115.11B	-67.93B	-159.91B	-57.59B	-57.54B
Financing Cash Flow	-125.28B	-78.89B	-90.78B	-57.63B	-36.64B	-68.30B

Nitto Denko Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3763.00
• 50DMA: Negative
• 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:6988, the sentiment is Positive. The current price of 3763 is below the 20-day moving average (MA) of 3781.50, below the 50-day MA of 3803.48, and above the 200-day MA of 3131.99, indicating a neutral trend. The MACD of -15.56 indicates Positive momentum. The RSI at 49.37 is Neutral, neither overbought nor oversold. The STOCH value of 42.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	¥751.96B	21.26	12.15%	1.58%	2.62%	2.81%
4612	75 Outperform	$2.45T	15.12	10.44%	1.53%	9.81%	32.64%
6988	70 Outperform	¥2.45T	20.55	11.98%	1.54%	1.84%	-6.57%
5201	67 Neutral	¥1.12T	21.59	3.63%	3.98%	-1.17%	―
4183	64 Neutral	¥743.62B	41.56	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	¥554.63B	-75.42	-1.15%	3.49%	-6.83%	-123.67%

Nitto Denko Corporate Events

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.

Nitto Denko Reports Decline in Semi-Annual Financial Results

Nitto Denko Corporation reported a decline in their financial results for the six months ended September 30, 2025, with revenue and profits showing a decrease compared to the same period last year. Despite the drop in earnings, the company has maintained a strong equity position, with no significant changes in accounting policies or consolidation scope, and has revised its forecast for the fiscal year ending March 31, 2026.

Nitto Denko Announces Cancellation of Treasury Shares

Nitto Denko Corporation announced its decision to cancel a portion of its treasury shares, amounting to 28,101,050 shares, which represents 3.98% of the total shares issued before cancellation. This move aligns with the company’s policy to manage treasury shares effectively, ensuring that any shares exceeding the required amount for specific purposes, such as executive remuneration, are considered for cancellation. The cancellation is scheduled for October 15, 2025, and will result in a total of 678,659,700 shares issued post-cancellation.