Kawasaki Heavy Industries (7012) AI Stock Analysis

• Market Cap: ¥2.07T
• Dividend Yield: 1.4%
• Average Volume (3M): 5.36M
• Price to Earnings (P/E): 21.5
• Beta (1Y): 2.02
• Revenue Growth: 14.12%
• EPS Growth: 54.64%
• Country: JP
• Employees: 39,689
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 106.77
• Shares Outstanding: 167,921,800
• 10 Day Avg. Volume: 5,883,960
• 30 Day Avg. Volume: 5,358,010
• PEG Ratio: 0.07
• Price to Book (P/B): 2.13
• Price to Sales (P/S): 0.70
• P/FCF Ratio: 29.75
• 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: ¥14,000.00
• Price Target Upside: 26.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: ¥12,133.00 ▲(10.00% Upside)

Kawasaki Heavy Industries scores well due to strong financial performance and positive technical indicators. However, valuation concerns and cash flow challenges slightly temper the overall outlook.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a positive trajectory, suggesting strong demand across its diverse business segments, which supports long-term business expansion.

Profitability

Stable profit margins reflect effective cost management and pricing strategies, ensuring sustainable profitability and resilience against market fluctuations.

Equity Utilization

Strong return on equity indicates efficient management and utilization of shareholder funds, enhancing investor confidence and supporting long-term growth.

Negative Factors

Declining Free Cash Flow

A significant decline in free cash flow could limit future investment capabilities and financial flexibility, potentially impacting long-term strategic initiatives.

High Debt Levels

High debt levels pose risks if interest rates rise or cash flows decrease, potentially straining financial resources and limiting growth opportunities.

Operational Cost Pressures

Declining EBIT and EBITDA margins suggest rising operational costs or pricing pressures, which could erode profitability if not managed effectively.

Kawasaki Heavy Industries Business Overview & Revenue Model

Company Description

Kawasaki Heavy Industries, Ltd. (TSE: 7012) is a diversified multinational corporation based in Japan, primarily engaged in the manufacturing of heavy machinery and equipment. The company operates across several sectors, including aerospace, defense, rolling stock (railway vehicles), shipbuilding, industrial equipment, and energy systems. Core products and services include aircraft, missile systems, railway vehicles, marine vessels, and various industrial machinery, showcasing its extensive engineering capabilities and innovation in technology.

How the Company Makes Money

Kawasaki Heavy Industries generates revenue through multiple key streams across its diverse business segments. The aerospace and defense division contributes significantly through contracts for military and commercial aircraft, as well as missile and defense systems. The rolling stock segment earns revenue from the production of trains and related infrastructure. Shipbuilding generates income from the construction of commercial and naval vessels. The industrial equipment segment provides machinery and systems for various industries, while the energy systems division focuses on power generation and environmental solutions. Strategic partnerships with governments and other corporations, along with long-term contracts, play a crucial role in stabilizing revenue, particularly in the defense and aerospace sectors, where projects often span several years.

Kawasaki Heavy Industries Financial Statement Overview

Summary

Kawasaki Heavy Industries shows solid revenue growth and profitability with a strong equity position and no debt reliance. However, cash flow challenges and room for operational efficiency improvements are notable concerns.

Income Statement

Kawasaki Heavy Industries shows a solid revenue growth rate of 2.08% TTM, indicating a positive trajectory. The gross profit margin of 20.27% and net profit margin of 4.13% TTM reflect stable profitability. However, the EBIT margin of 5.63% and EBITDA margin of 10.02% TTM suggest room for operational efficiency improvements.

Balance Sheet

The company has a strong equity base with a debt-to-equity ratio of 0.0 TTM, indicating no reliance on debt financing. Return on equity is healthy at 13.20% TTM, showcasing effective use of equity. However, the equity ratio is not provided, limiting a full assessment of asset financing.

Cash Flow

Operating cash flow is positive, but the free cash flow growth rate is negative at -26.26% TTM, indicating potential cash flow challenges. The operating cash flow to net income ratio of 0.08 TTM suggests limited cash generation relative to net income, while the free cash flow to net income ratio of 0.34 TTM shows some cash flow support.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.24T	2.13T	1.85T	1.73T	1.50T	1.49T
Gross Profit	426.23B	431.54B	312.24B	333.82B	253.26B	191.16B
EBITDA	214.52B	239.98B	130.22B	154.01B	109.92B	50.36B
Net Income	96.42B	88.00B	25.38B	53.03B	12.64B	-19.33B
Balance Sheet
Total Assets	3.07T	3.02T	2.68T	2.46T	2.17T	1.96T
Cash, Cash Equivalents and Short-Term Investments	86.45B	144.55B	95.18B	138.42B	119.12B	126.70B
Total Debt	878.03B	889.51B	845.23B	785.26B	501.48B	571.35B
Total Liabilities	2.25T	2.29T	2.03T	1.86T	1.65T	1.48T
Stockholders Equity	761.79B	702.91B	634.09B	576.20B	505.48B	465.33B
Cash Flow
Free Cash Flow	23.64B	50.26B	-48.40B	-35.33B	97.95B	-17.09B
Operating Cash Flow	159.83B	148.94B	31.66B	23.62B	156.89B	34.60B
Investing Cash Flow	-131.05B	-111.20B	-89.81B	-77.46B	-58.40B	-37.39B
Financing Cash Flow	-87.14B	9.61B	12.91B	85.31B	-108.90B	23.09B

Kawasaki Heavy Industries Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11030.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7012, the sentiment is Positive. The current price of 11030 is below the 20-day moving average (MA) of 11203.00, above the 50-day MA of 10983.84, and above the 200-day MA of 9923.30, indicating a bullish trend. The MACD of 248.23 indicates Negative momentum. The RSI at 67.02 is Neutral, neither overbought nor oversold. The STOCH value of 92.75 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7012.

Kawasaki Heavy Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6104	81 Outperform	¥96.28B	17.96	5.02%	3.23%	-10.00%	-51.92%
7012	70 Outperform	¥2.07T	21.48	13.25%	1.40%	14.12%	54.64%
7013	70 Outperform	$3.49T	26.50	26.54%	0.71%	-1.66%	19.02%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6361	60 Neutral	$2.04T	27.14	16.00%	1.38%	13.96%	12.97%
5631	59 Neutral	¥635.20B	28.81	11.66%	1.03%	10.11%	41.98%
6302	59 Neutral	¥541.83B	159.95	0.59%	2.95%	-2.67%	-85.21%

Kawasaki Heavy Industries Corporate Events

Kawasaki Heavy Industries Concludes Misconduct Probes on Submarine Repairs and Engine Testing

Kawasaki Heavy Industries has released final investigation reports into misconduct involving submarine repairs at its Kobe Shipyard and fuel efficiency testing of submarine engines manufactured up to 2021, following earlier disclosures in 2024 and 2025. The company has completed the work of two Special Investigative Committees led by external legal experts, acknowledged inaccurate work-hour records and other compliance breaches, and is implementing group-wide measures to prevent recurrence under a Special Compliance Promotion Committee chaired by the president, focused on strengthening systems to prevent misconduct, improving detection, and reforming organizational culture. Kawasaki is still assessing whether the findings will affect its financial results and has pledged to prioritize restoring trust and enhancing governance in response to repeated compliance issues.

The most recent analyst rating on (JP:7012) stock is a Buy with a Yen12133.00 price target. To see the full list of analyst forecasts on Kawasaki Heavy Industries stock, see the JP:7012 Stock Forecast page.

Kawasaki Heavy Industries Reports Record Revenue Amid Profit Challenges

Kawasaki Heavy Industries reported a record revenue of 996.2 billion yen for the second quarter of FY2025, despite a decline in business profit due to yen appreciation and higher tariffs. The company raised its full-year revenue forecast to 2,340.0 billion yen, maintaining its business profit forecast at 145.0 billion yen, with expectations of stronger performance in the second half driven by defense contracts and increased after-sales services for aircraft engines.

The most recent analyst rating on (JP:7012) stock is a Buy with a Yen13000.00 price target. To see the full list of analyst forecasts on Kawasaki Heavy Industries stock, see the JP:7012 Stock Forecast page.

Kawasaki Heavy Industries Reports Strong Half-Year Results with Revised Earnings Forecast

Kawasaki Heavy Industries announced its consolidated financial results for the six months ending September 30, 2025. The company reported a notable increase in revenue and profit compared to the previous year, reflecting strong operational performance. Despite the positive financial results, the company revised its earnings forecast for the fiscal year ending March 31, 2026, indicating adjustments in its financial expectations. The announcement underscores Kawasaki’s efforts to maintain its competitive position in the market while adapting to changing economic conditions.

The most recent analyst rating on (JP:7012) stock is a Buy with a Yen13000.00 price target. To see the full list of analyst forecasts on Kawasaki Heavy Industries stock, see the JP:7012 Stock Forecast page.