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Mitsubishi Heavy Industries Ltd (JP:7011)
:7011
RESEARCH TOOLSreports
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Mitsubishi Heavy Industries
(OTC:7011)
74Outperform
Positive Factors
Earnings Potential
The analyst's new target price for Mitsubishi Heavy Industries reflects confidence in its future earnings potential and aligns with historical valuation averages.
Leadership and Strategy
The new CEO plans to maximize MHI's expertise in digital technology by training employees with various backgrounds and will execute future business strategy without being constrained by MHI's traditional practices.
Sector Performance
Analyst upgrades the stock rating of Mitsubishi Heavy Industries to Buy from Neutral due to its favorable sector-relative risk/reward profile.
Negative Factors
Project Management
MHI's participation in large-scale projects with insufficient preparation and its employees' strong sense of responsibility to fulfill customers' requests could have been a major factor behind the cost overrun in past years.
Mitsubishi Heavy Industries (7011) vs. S&P 500 (SPY)
Market Cap
$9.38T
Dividend Yield0.73%
Average Volume (3M)63.77M
Price to Earnings (P/E)36.6
Beta (1Y)1.67
Revenue Growth9.25%
EPS Growth26.69%
CountryJP
Employees77,697
SectorIndustrials
Sector Strength82
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)21.83
Shares Outstanding3,373,647,700
10 Day Avg. Volume50,316,151
30 Day Avg. Volume63,765,504
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2,900.87Price Target Upside6.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Mitsubishi Heavy Industries Business Overview & Revenue Model
Company DescriptionMitsubishi Heavy Industries, Ltd. (MHI) is a diversified Japanese multinational engineering, electrical equipment, and electronics company. It operates through various segments including energy systems, industrial machinery, aerospace, and shipbuilding, among others. MHI provides a wide array of products and services, ranging from power generation systems, air conditioning systems, to defense and space technologies. The company is headquartered in Tokyo, Japan, and is recognized for its innovative engineering solutions and contributions to global industrial progress.
How the Company Makes MoneyMitsubishi Heavy Industries generates revenue through its diverse portfolio of products and services across multiple sectors. The energy systems division, which includes power generation equipment and solutions, contributes significantly to its earnings, especially with the global demand for energy-efficient and sustainable solutions. The industrial machinery segment provides machinery for various industries, including logistics, automotive, and chemical, generating substantial income through sales and maintenance services. The aerospace and defense sector is also a crucial revenue stream, with contracts for manufacturing aircraft, spacecraft, and defense equipment. Additionally, the shipbuilding and ocean development segment offers commercial and military vessels. MHI's extensive global partnerships and strategic collaborations further enhance its sales and market reach, allowing it to tap into new markets and drive growth.
Mitsubishi Heavy Industries Financial Statement Overview
Summary
Mitsubishi Heavy Industries demonstrates robust financial health, with strong revenue and profit growth as evidenced by an 87 on the income statement score. The balance sheet is stable at a score of 75, indicating moderate debt levels and efficient use of equity. Cash flow management is efficient with a score of 80, reflecting strong cash generation capabilities. Overall, the company is well-positioned for growth despite some debt concerns.Income Statement
Mitsubishi Heavy Industries has demonstrated strong revenue growth, with a significant increase from previous years. The company's gross profit margin is healthy, and both EBIT and EBITDA margins are robust, suggesting efficient operations. Net profit margin is also solid, indicating profitability. Overall, the income statement reflects a positive trajectory in revenues and profit margins.―
Balance Sheet
The balance sheet shows a stable financial position with a moderate debt-to-equity ratio. Return on equity is strong, indicating effective use of shareholders' investments. The equity ratio is adequate, reflecting a balanced capital structure. While the company manages its liabilities well, further reduction in debt could enhance its financial stability.75
Cash Flow
Free cash flow has grown significantly, indicating improved cash generation capabilities. The operating cash flow to net income ratio is high, suggesting good cash conversion from earnings. Additionally, the company maintains a healthy free cash flow to net income ratio, reflecting strong cash management strategies.―
| Breakdown | ||||
| Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.66T | 4.20T | 3.86T | 3.70T | 4.04T | Gross Profit |
| 930.11B | 765.02B | 655.91B | 583.48B | 710.04B | EBIT |
| 282.54B | 193.32B | 160.24B | 54.08B | -29.54B | EBITDA |
| 482.05B | 351.72B | 307.43B | 284.02B | 125.01B | Net Income Common Stockholders |
| 222.02B | 130.45B | 113.54B | 40.64B | 87.12B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 471.06B | 383.05B | 385.21B | 276.10B | 310.17B | Total Assets |
| 6.26T | 5.47T | 5.12T | 4.81T | 4.99T | Total Debt |
| 1.14T | 1.19T | 1.08T | 1.24T | 1.37T | Net Debt |
| 711.68B | 844.77B | 764.02B | 990.59B | 1.09T | Total Liabilities |
| 3.90T | 3.64T | 3.45T | 3.37T | 3.70T | Stockholders Equity |
| 2.24T | 1.74T | 1.58T | 1.37T | 1.22T |
| Cash Flow | Free Cash Flow | |||
| 170.70B | -51.02B | 156.31B | -241.16B | 206.27B | Operating Cash Flow |
| 331.19B | 80.89B | 285.56B | -94.95B | 452.56B | Investing Cash Flow |
| -131.05B | -45.58B | 16.31B | -182.25B | -239.57B | Financing Cash Flow |
| -158.90B | -18.90B | -255.77B | 221.74B | -204.45B |
Mitsubishi Heavy Industries Technical Analysis
Positive
2731.50
Price Trends
2530.62
Positive
2365.20
Positive
2187.27
Positive
Market Momentum
91.02
Negative
54.46
Neutral
68.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7011, the sentiment is Positive. The current price of 2731.5 is above the 20-day moving average (MA) of 2648.00, above the 50-day MA of 2530.62, and above the 200-day MA of 2187.27, indicating a bullish trend. The MACD of 91.02 indicates Negative momentum. The RSI at 54.46 is Neutral, neither overbought nor oversold. The STOCH value of 68.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7011.
Mitsubishi Heavy Industries Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | ¥3.93T | 8.99 | 4.52% | 5.97% | 13.78% | ||
74 Outperform | $9.38T | 36.64 | 10.53% | 0.73% | 9.25% | 26.69% | |
73 Outperform | ¥156.06B | 8.46 | 2.49% | 11.87% | -3.06% | ||
69 Neutral | $1.70T | 14.38 | 25.94% | 1.00% | 26.13% | ― | |
69 Neutral | $1.41T | 17.01 | 12.94% | 1.53% | 15.31% | ― | |
64 Neutral | $4.30B | 11.84 | 5.23% | 249.82% | 4.06% | -10.21% | |
52 Neutral | ¥289.83B | 39.80 | 5.48% | -3.42% | -35.09% |
* Industrials Sector Average
Performance Comparison
JP:7011
Mitsubishi Heavy Industries
2,731.50
1,462.49
115.25%
JP:6301
Komatsu Ltd.
4,258.00
-195.54
-4.39%
JP:6471
NSK Ltd.
628.10
-161.04
-20.41%
JP:7004
Hitachi Zosen Corporation
940.00
-260.74
-21.71%
JP:7013
IHI
12,495.00
8,580.53
219.20%
JP:7012
Kawasaki Heavy Industries
8,273.00
2,565.55
44.95%
Mitsubishi Heavy Industries Earnings Call Summary
Earnings Call Date:May 09, 2025
(Q3-2024)
| % Change Since: -5.57%|
Next Earnings Date:Aug 01, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth in order intake, revenue, and profit across several segments, alongside strategic decisions like a stock split. However, there were challenges with negative free cash flow and decreased operating cash flow. Despite these lowlights, the overall sentiment of the call is positive due to strong performance and optimistic forecasts.Q3-2024 Updates
Positive Updates
Significant Increase in Order Intake
Order intake through quarter 3 reached JPY 4,513 billion, equaling the full year FY 2022 level. The full-year forecast was raised by JPY 400 billion to JPY 6 trillion.
Revenue Growth Across All Segments
Revenue increased year-over-year across all segments, excluding a JPY 100 billion effect from foreign exchange rates. The company-wide full-year revenue forecast was raised by JPY 100 billion to JPY 4.4 billion.
Large Increases in Business Profit and Net Income
Business profit and net income showed large year-over-year increases due to revenue growth and price optimization efforts.
Positive Forecasts in Key Segments
Energy Systems, Logistics, Thermal and Drive Systems, and Aircraft, Defense and Space segments all saw increases in order intake, revenue, and profit forecasts.
Stock Split Decision
A 10-for-1 stock split was announced to meet Tokyo Stock Exchange guidelines and potentially lower the share trading price.
Negative Updates
Negative Free Cash Flow
Free cash flow was negative JPY 400 billion, JPY 200 billion lower than FY 2022, although large cash inflows are expected in quarter 4.
Decrease in Operating Cash Flow
Operating cash flow significantly decreased year-over-year due to an expansion in the top line and changes in the product mix.
Challenges in Plant and Infrastructure Systems
Order intake decreased year-over-year in the Plant and Infrastructure Systems segment, although revenue and profit increased.
Company Guidance
In the earnings call for the third quarter of 2024, Hisato Kozawa provided detailed guidance on several key financial metrics for the company. The order intake saw a significant year-over-year increase, reaching JPY 4,513 billion through the third quarter, matching the full year level of FY 2022, and the forecast for the full year was raised by JPY 400 billion to JPY 6 trillion. Revenue also increased across all segments, with foreign exchange effects contributing around JPY 100 billion to the growth, leading to an updated company-wide revenue forecast of JPY 4.4 billion. Business profit and net income also experienced substantial gains, attributed to price optimization and increased revenue. However, free cash flow was negative JPY 400 billion, primarily due to higher outflows from growth investments and reduced inflows from asset sales. Despite this, the company anticipates large cash inflows in the fourth quarter. Total assets increased by JPY 543.3 billion, driven by currency translation effects and asset acquisitions. The call also discussed specific segment performance, with notable increases in order intake, revenue, and profit in the Energy Systems and Logistics segments, leading to raised forecasts across these areas. Additionally, the Aircraft, Defense, and Space segment benefited from increased 787 deliveries and a weak yen, prompting an upward revision of the profit forecast to JPY 60 billion. Lastly, Kozawa announced a 10-for-1 stock split to align with the Tokyo Stock Exchange's guidelines.Mitsubishi Heavy Industries Corporate Events
Mitsubishi Heavy Industries Adjusts Subsidiary Liquidation Timeline
Mar 31, 2025
Mitsubishi Heavy Industries has announced a change in the expected completion date for the liquidation of its subsidiary, MHI Holding Denmark ApS, due to the time required to complete necessary procedures under Danish law. This change is not expected to impact the company’s consolidated financial results.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.