IHI (7013) AI Stock Analysis

• Market Cap: ¥4.64T
• Dividend Yield: 0.71%
• Average Volume (3M): 32.90M
• Price to Earnings (P/E): 37.7
• Beta (1Y): 1.51
• Revenue Growth: -1.66%
• EPS Growth: 19.02%
• Country: JP
• Employees: 28,237
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 27.45
• Shares Outstanding: 1,082,759,600
• 10 Day Avg. Volume: 44,762,279
• 30 Day Avg. Volume: 32,899,911
• PEG Ratio: -0.05
• Price to Book (P/B): 3.24
• Price to Sales (P/S): 0.96
• P/FCF Ratio: 13.31
• 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: ¥5,091.14
• Price Target Upside: 18.32% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 120.02
• Revenue Forecast (FY): ¥1.67T

• Rating: 67 Neutral
• Price Target: ¥4,253.00 ▼(-1.16% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by a strong TTM earnings and revenue rebound, supported by a clear upward technical trend. Offsetting these positives are balance-sheet leverage and weak cash conversion, and valuation is a key headwind given the high P/E and low dividend yield.

Positive Factors

Diversified industrial portfolio

IHI’s multi-domain business spanning energy, industrial plants, aerospace and large engineered systems spreads demand risk across end markets. This diversification supports steadier revenue cycles, cross-selling of engineering capabilities, and resilience when individual sectors slow, aiding medium-term stability.

Recent margin and revenue rebound

A sharp TTM revenue rise and materially improved EBIT/net margins indicate stronger pricing, higher utilization, or improved project execution. Sustained margin recovery enhances earnings power, funds reinvestment and supports returns if maintained through improved project controls and higher-margin service mix.

After-sales and services revenue stream

Lifecycle services and aftermarket support provide recurring, less cyclical cash flow versus one-off project revenue. A growing installed base and long-term service contracts can stabilize top-line and margins, improve visibility for cash flow planning, and raise lifetime customer value over months to years.

Negative Factors

Meaningful leverage

Net leverage above parity reduces financial flexibility and amplifies earnings volatility; higher debt servicing needs increase sensitivity to interest rates and project cash timing. Over a 2–6 month horizon, leverage limits capacity for opportunistic capex or bidding on large EPC contracts without refinancing.

Weak cash conversion

Earnings are not fully translating into free cash flow, likely from working-capital swings or project timing. Poor cash conversion constrains discretionary spending, raises refinancing and dividend risk, and leaves less buffer for overruns on long-duration contracts, undermining sustainable capital deployment.

Earnings and execution volatility

Large swings between profit and loss reflect project execution, contract timing, or demand cyclicality. Such volatility weakens predictability for margins and cash flow, complicates backlog valuation and risk management, and can raise customer and lender scrutiny on multi-year EPC commitments.

IHI Business Overview & Revenue Model

Company Description

IHI Corporation operates in resources, energy, and environment; social infrastructure and offshore facilities; industrial systems and general-purpose machinery; aero engine, space, and defense; and other business areas in Japan and internationally. It provides carbon reduction solutions; gas turbines and engines, and diesel engines for land use, and high-speed ships and other marine vessels; LNG receiving terminals and storage tanks; and equipment for various plants. The company also constructs natural gas liquefaction, oil refining, petrochemicals, LPG, and other process plants; develops and constructs nuclear fuel cycle systems; provides components for boiling and pressurized water reactors; and constructs bridges and steel structures. It offers water gates for rivers and dams; environmental monitoring products; concrete construction materials; 3D laser radars, X-ray inspection systems, monitoring and disaster prevention equipment, oil leak monitors, and vibration control and seismic isolation floor systems; shield tunneling machines and automatic segment assembling systems; transportation systems; LPG/LEG storage tanks; floating LNG/LPG production, storage, and offloading units; and semi-submersible rigs, mega-float, and others. The company also leases and sells real estate properties; develops houses; and provides compressors, cryogenic products, logistics systems, steelmaking equipment, machinery for ships, turbochargers for vehicles, separators, lubricating systems, pulp and paper machinery, materials handling systems, agricultural machinery, parking systems, boilers, and life associated equipment. It offers factory, heat treatment and surface engineering solutions; aero engines; air traffic control systems; and rocket systems and space exploration solutions. The company was formerly known as Ishikawajima-Harima Heavy Industries Co., Ltd and changed its name to IHI Corporation in 2007. IHI Corporation was founded in 1853 and is headquartered in Tokyo, Japan.

How the Company Makes Money

IHI generates revenue through multiple streams, including the manufacturing and sale of high-value products such as gas turbines and other machinery used in power generation and industrial applications. The company also earns income from its aerospace segment, which supplies components to aircraft manufacturers and offers maintenance services. Additionally, IHI benefits from long-term contracts and partnerships with various industries, including energy and defense, which provide a steady revenue flow. The company’s focus on engineering solutions and technological advancements further enhances its capacity to secure projects and collaborations, contributing to its overall financial performance.

IHI Financial Statement Overview

Summary

Strong profitability and revenue rebound in TTM (net margin ~8.2%, EBIT margin ~9.8%, revenue growth ~147%) supports a solid score, but durability is tempered by recent earnings volatility (FY2024 loss), meaningful leverage (debt-to-equity ~1.07), and weak cash conversion (FCF ~0.33x net income).

Income Statement

Profitability has rebounded strongly after a loss in FY2024, with TTM (Trailing-Twelve-Months) net margin at ~8.2% and EBIT margin near ~9.8%, both materially better than the prior two years. Revenue growth is also very strong in TTM (Trailing-Twelve-Months) (~147%), signaling a sharp upswing in activity. The key weakness is volatility: the company swung from positive profits (FY2022–FY2023) to a sizable loss in FY2024 and back to solid profitability, which lowers confidence in the durability of current margins.

Balance Sheet

Leverage is meaningful, with debt running slightly above equity (debt-to-equity ~1.07 in TTM (Trailing-Twelve-Months), similar in FY2025), which can amplify results in both directions. Return on equity is very strong in the latest period (TTM (Trailing-Twelve-Months) ~26%), reflecting the earnings recovery, but it comes with higher balance-sheet risk given the leverage and the recent history of negative equity returns in FY2024. Overall asset base is large and growing, but the capital structure remains a moderating factor.

Cash Flow

Cash generation improved, with TTM (Trailing-Twelve-Months) free cash flow positive (~¥68B) and sharply higher versus the prior year, but cash conversion is still a concern. In TTM (Trailing-Twelve-Months), free cash flow covers only about one-third of net income (~0.33), indicating profits are not fully translating into discretionary cash. Operating cash flow relative to revenue also appears low (roughly ~11% in TTM (Trailing-Twelve-Months)), suggesting working-capital or cash-timing swings remain a risk despite the rebound.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	1.61T	1.63T	1.32T	1.35T	1.17T	1.11T
Gross Profit	365.34B	374.51B	144.85B	282.00B	209.41B	179.97B
EBITDA	229.58B	190.62B	-28.66B	122.32B	99.64B	81.83B
Net Income	120.96B	112.74B	-68.21B	44.55B	66.06B	13.09B
Balance Sheet
Total Assets	2.45T	2.24T	2.10T	1.94T	1.88T	1.83T
Cash, Cash Equivalents and Short-Term Investments	105.06B	136.81B	138.81B	124.75B	145.49B	120.77B
Total Debt	745.59B	622.66B	681.96B	628.59B	621.84B	731.13B
Total Liabilities	1.86T	1.73T	1.70T	1.49T	1.47T	1.51T
Stockholders Equity	563.69B	481.73B	375.99B	431.25B	382.13B	300.77B
Cash Flow
Free Cash Flow	68.28B	117.39B	1.12B	-8.46B	68.58B	-21.08B
Operating Cash Flow	156.72B	177.63B	62.12B	54.12B	114.16B	36.38B
Investing Cash Flow	-67.13B	-58.59B	-50.41B	-51.52B	28.01B	-40.42B
Financing Cash Flow	-81.55B	-116.45B	-3.86B	-24.86B	-121.57B	-23.77B

IHI Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4303.00
• 50DMA: Positive
• 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:7013, the sentiment is Positive. The current price of 4303 is above the 20-day moving average (MA) of 4091.20, above the 50-day MA of 3559.30, and above the 200-day MA of 2738.33, indicating a bullish trend. The MACD of 180.68 indicates Positive momentum. The RSI at 60.48 is Neutral, neither overbought nor oversold. The STOCH value of 44.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7013.

IHI Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6268	71 Outperform	¥594.58B	38.64	5.25%	2.13%	-2.23%	130.96%
6594	69 Neutral	¥2.82T	23.56	6.88%	0.97%	5.35%	26.51%
7013	67 Neutral	¥4.64T	37.70	26.54%	0.71%	-1.66%	19.02%
6361	66 Neutral	¥2.53T	33.32	16.00%	1.38%	13.96%	12.97%
7012	64 Neutral	¥3.06T	27.84	13.25%	1.40%	14.12%	54.64%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6302	59 Neutral	¥756.21B	23.98	0.59%	2.95%	-2.67%	-85.21%

IHI Corporate Events

IHI Overhauls Executive Lineup in Planned Leadership Transition

IHI Corporation has announced a broad reshuffle of its leadership structure effective April 1, 2026, adjusting roles among directors, representative directors, and executive officers to strengthen governance and operational oversight. The changes elevate several internal leaders, including shifts in board roles and promotions within the Aero-Engine, Space & Defense and Industrial Systems & General-Purpose Machinery business areas, while a cohort of senior executives transition to advisor positions, signaling a planned generational shift and continuity in strategic areas such as business development, R&D, manufacturing systems, finance, and human resources.

New executive officers are being appointed to head key divisions, including monozukuri system transformation, corporate R&D, corporate secretariat, and core business areas, which should reinforce IHI’s internal capabilities in innovation, organizational management, and global business expansion. At the same time, retiring managing and executive officers will remain involved as advisors or executive fellows, preserving institutional knowledge as the company rebalances its leadership to support future growth, enhance execution in its main business domains, and potentially sharpen its competitive position in high-tech industrial and defense markets.

The most recent analyst rating on (JP:7013) stock is a Hold with a Yen4113.00 price target. To see the full list of analyst forecasts on IHI stock, see the JP:7013 Stock Forecast page.

IHI Elevates Aero-Engine and Defense Chief Atsushi Sato to Representative Director

IHI Corporation has announced a leadership change, appointing Atsushi Sato as Representative Director, Senior Executive Officer, and President of the Aero-Engine, Space & Defense Business Area effective April 1, 2026. Sato, a company veteran since 1991 with extensive experience in business development and currently head of the Aero-Engine, Space & Defense division, is expected to strengthen governance and continuity in a strategically important business segment for IHI’s growth and competitiveness.

His promotion from Managing Executive Officer and division president to Representative Director underscores the growing weight of the aero-engine, space, and defense operations within IHI’s overall portfolio. The move signals a consolidation of leadership around high-value, technology-intensive businesses, which could influence capital allocation, long-term strategy, and stakeholder expectations regarding the company’s positioning in the global aerospace and defense supply chain.

The most recent analyst rating on (JP:7013) stock is a Hold with a Yen4113.00 price target. To see the full list of analyst forecasts on IHI stock, see the JP:7013 Stock Forecast page.

IHI Outlines Q3 FY2025 Results and Ongoing Business Restructuring

IHI released its financial results for the third quarter of fiscal 2025, covering the year ending March 31, 2026, under International Financial Reporting Standards. The disclosure organizes performance by four core business areas—energy, infrastructure, industrial systems, and aerospace—signaling continued emphasis on transparency in segment reporting for investors.

Alongside the quarterly numbers, the company outlined full-year consolidated forecasts and updated stakeholders on progress in reforming its business structure. By linking earnings guidance with its ongoing organizational reforms, IHI is positioning itself to improve operational efficiency and clarify its strategic direction across key industrial and aerospace markets.

The most recent analyst rating on (JP:7013) stock is a Hold with a Yen4113.00 price target. To see the full list of analyst forecasts on IHI stock, see the JP:7013 Stock Forecast page.

IHI Posts Higher Profit Despite Lower Revenue, Keeps FY2026 Outlook Intact

IHI Corporation reported nine-month revenue to December 31, 2025 of ¥1.13 trillion, down 1.8% year on year, while operating profit slipped 0.9% to ¥102.5 billion but profit attributable to owners rose 10.7% to ¥85.0 billion, helped by higher profit before tax and improved margins. The group strengthened its financial position with total assets increasing to ¥2.45 trillion and equity attributable to owners rising to ¥563.7 billion, maintained its full-year forecast of modest revenue growth and double-digit profit expansion, and highlighted the impact of a 7-for-1 stock split and adjusted dividend per share structure without revising previously announced dividend or earnings outlooks.

The most recent analyst rating on (JP:7013) stock is a Hold with a Yen4113.00 price target. To see the full list of analyst forecasts on IHI stock, see the JP:7013 Stock Forecast page.

IHI Discloses Increase in Stake Held by Capital Research and Management Company

IHI Corporation has disclosed that U.S.-based investment adviser Capital Research and Management Company, together with its joint holders, has increased its stake in IHI to 10.40% of total voting rights as of January 26, 2026, up from 8.97%. The change, identified through a large shareholding report filed with Japanese regulators, reflects a higher level of institutional ownership following IHI’s 7-for-1 stock split in October 2025, but the company stated that the development does not currently entail any disclosed impact on its business outlook or operations.

The most recent analyst rating on (JP:7013) stock is a Buy with a Yen3925.00 price target. To see the full list of analyst forecasts on IHI stock, see the JP:7013 Stock Forecast page.

IHI Subsidiary to Absorb Sumitomo Heavy Industries’ Mechanical Parking Business

IHI Corporation’s consolidated subsidiary IHI Transport Machinery Co., Ltd. will acquire the mechanical parking system business of Sumitomo Heavy Industries Material Handling Systems Co., Ltd. via an absorption-type company split effective November 1, 2026, integrating Sumitomo’s underground and puzzle-type parking operations with IHI’s tower-type and multi-level parking portfolio. By unifying these complementary businesses on a shared management foundation, IHI aims to improve operational efficiency, reinforce its leadership in the parking systems market, and build a more resilient growth platform aligned with its mid-term strategy to focus resources on high-potential businesses that address urban and social mobility challenges.

The most recent analyst rating on (JP:7013) stock is a Buy with a Yen3916.00 price target. To see the full list of analyst forecasts on IHI stock, see the JP:7013 Stock Forecast page.