IHI (7013) AI Stock Analysis

• Market Cap: ¥4.09T
• Dividend Yield: 0.71%
• Average Volume (3M): 32.90M
• Price to Earnings (P/E): 30.2
• Beta (1Y): 1.55
• Revenue Growth: -1.66%
• EPS Growth: 19.02%
• Country: JP
• Employees: 28,237
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 41.81
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: ¥4,113.00 ▲(17.65% Upside)

The score is driven by strong technical uptrend and healthy profitability/ROE, offset by weakening top-line and free-cash-flow trends and a relatively expensive valuation (high P/E with low yield).

Positive Factors

High margins & ROE

IHI's strong TTM margins and 23.15% ROE indicate durable operational efficiency and effective capital deployment. Such profitability supports reinvestment in technology and facilities, provides cushion in cyclical markets, and underpins sustainable returns over the coming months.

Recurring services and lifecycle revenue

The company's aftermarket services create stable, recurring revenue that reduces reliance on volatile new-build project cycles. Lifecycle support generates higher-margin, repeat business and improves long-term revenue visibility and customer stickiness across installed equipment fleets.

Moderate leverage

A debt-to-equity around 1.04 signals measured leverage that supports funding of large engineered projects while limiting refinancing pressure. Combined with strong ROE, this suggests capacity to finance growth without excessive financial strain over the medium term.

Negative Factors

Shrinking revenue

A declining top line (-2.07% TTM) points to demand weakness, competitive pressure, or order timing variability. Persistent revenue contraction can erode scale economics, lower absorption of fixed costs, and make long-term margin maintenance and growth more challenging.

Weak free cash flow & cash conversion

A 55% drop in FCF growth and OCF/net income of 0.15 shows weak cash conversion from accounting profits. For a project-centric industrial, this raises concerns about working-capital demands, ability to fund capex or dividends internally, and increases reliance on external financing.

Project execution and contract risk

IHI's reliance on long-duration EPC projects exposes it to execution risk: cost overruns, delays, or unfavorable contract terms can materially compress margins and delay cash inflows. This structural risk reduces earnings predictability and can strain finances over multi-quarter horizons.

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

Profitability is strong (TTM gross margin 23.18%, EBIT margin 9.64%, EBITDA margin 14.44%) and ROE is robust (23.15%), but revenue is shrinking (-2.07% TTM) and free cash flow growth is down sharply (-55.16% TTM) with weak cash conversion (operating cash flow to net income 0.15).

Income Statement

IHI's income statement shows a strong recovery with a solid gross profit margin of 23.18% in TTM, indicating efficient cost management. The net profit margin of 6.54% reflects improved profitability. However, the revenue growth rate has declined by 2.07% in TTM, suggesting challenges in maintaining sales momentum. The EBIT and EBITDA margins are healthy at 9.64% and 14.44% respectively, showing operational efficiency.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 1.04 in TTM, indicating a balanced approach to leveraging. Return on equity is strong at 23.15%, showcasing effective use of equity to generate profits. However, the equity ratio is not explicitly provided, which limits a full assessment of asset financing stability.

Cash Flow

Cash flow analysis indicates a significant decline in free cash flow growth by 55.16% in TTM, raising concerns about cash generation capabilities. The operating cash flow to net income ratio is 0.15, suggesting moderate cash conversion efficiency. The free cash flow to net income ratio of 0.56 indicates a reasonable level of cash available after capital expenditures.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.58T	1.63T	1.32T	1.35T	1.17T	1.11T
Gross Profit	359.56B	374.51B	144.85B	282.00B	209.41B	179.97B
EBITDA	235.84B	224.01B	8.84B	149.11B	175.27B	114.47B
Net Income	129.34B	112.74B	-68.21B	44.55B	66.06B	13.09B
Balance Sheet
Total Assets	2.34T	2.24T	2.10T	1.94T	1.88T	1.83T
Cash, Cash Equivalents and Short-Term Investments	105.62B	136.81B	142.56B	129.12B	148.68B	122.16B
Total Debt	581.18B	514.72B	574.38B	519.49B	505.55B	605.93B
Total Liabilities	1.77T	1.73T	1.70T	1.49T	1.47T	1.51T
Stockholders Equity	540.65B	481.73B	375.99B	431.25B	382.13B	300.77B
Cash Flow
Free Cash Flow	42.46B	117.39B	1.12B	-8.46B	68.58B	-21.08B
Operating Cash Flow	127.94B	177.63B	62.12B	54.12B	114.16B	36.38B
Investing Cash Flow	-56.28B	-58.59B	-51.70B	-52.35B	27.93B	-40.48B
Financing Cash Flow	-61.77B	-116.45B	-2.57B	-24.04B	-121.49B	-23.71B

IHI Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3496.00
• 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:7013, the sentiment is Positive. The current price of 3496 is below the 20-day moving average (MA) of 3531.75, above the 50-day MA of 3143.06, and above the 200-day MA of 2530.30, indicating a bullish trend. The MACD of 161.50 indicates Negative momentum. The RSI at 64.84 is Neutral, neither overbought nor oversold. The STOCH value of 83.41 is Negative, 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
6361	71 Outperform	¥2.34T	31.21	16.00%	1.38%	13.96%	12.97%
6594	69 Neutral	¥2.76T	22.32	6.88%	0.97%	5.35%	26.51%
7013	67 Neutral	¥4.09T	30.21	26.54%	0.71%	-1.66%	19.02%
7012	66 Neutral	¥2.33T	23.82	13.25%	1.40%	14.12%	54.64%
6268	65 Neutral	$521.47B	32.93	5.25%	2.13%	-2.23%	130.96%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6302	59 Neutral	¥648.41B	181.68	0.59%	2.95%	-2.67%	-85.21%

IHI Corporate Events

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.

IHI Corporation Reports Mixed Financial Results and Announces Stock Split

IHI Corporation reported its consolidated financial results for the six months ending September 30, 2025, showing a decline in revenue and operating profit compared to the previous year. Despite this, the company experienced significant growth in profit before tax and profit attributable to owners of the parent, indicating improved efficiency or cost management. The company also announced a 7-for-1 stock split, which affects dividend calculations and earnings per share forecasts, reflecting strategic financial adjustments to enhance shareholder value.

The most recent analyst rating on (JP:7013) stock is a Buy with a Yen3512.00 price target. To see the full list of analyst forecasts on IHI stock, see the JP:7013 Stock Forecast page.