IHI Corporation (JP:7013)
:7013
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IHI
(7013)
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Rating:67Neutral
Price Target:
¥3,573.00
▲(8.50% Upside)
Action:ReiteratedDate: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 engineering portfolio
IHI’s portfolio spans energy/infrastructure, industrial machinery and aerospace, giving it multiple end-market exposure and long-duration project work. This diversification reduces single-market cyclicality, supports cross-selling, and sustains revenue streams over multi-year horizons.
Negative Factors
Meaningful financial leverage
Net debt slightly above equity raises balance-sheet risk, reducing financial flexibility for capex or bid support and amplifying earnings volatility. In capital-intensive, multi-year projects, higher leverage increases refinancing and covenant risk if cash flows weaken.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified engineering portfolio
IHI’s portfolio spans energy/infrastructure, industrial machinery and aerospace, giving it multiple end-market exposure and long-duration project work. This diversification reduces single-market cyclicality, supports cross-selling, and sustains revenue streams over multi-year horizons.
Read all positive factors
IHI (7013) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥3.54T
Dividend Yield0.71%
Average Volume (3M)32.90M
Price to Earnings (P/E)25.1
Beta (1Y)1.56
Revenue Growth-1.66%
EPS Growth19.02%
CountryJP
Employees28,237
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)27.45
Shares Outstanding1,082,759,600
10 Day Avg. Volume44,762,279
30 Day Avg. Volume32,899,911
Financial Highlights & Ratios
PEG Ratio-0.05
Price to Book (P/B)3.24
Price to Sales (P/S)0.96
P/FCF Ratio13.31
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥4,643.33Price Target Upside41.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)132.07
Revenue Forecast (FY)¥1.79T
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...
How the Company Makes Money
IHI primarily makes money by selling engineered products and delivering engineering, procurement, and construction (EPC)-type projects for large industrial and infrastructure customers, plus earning recurring revenue from after-sales services over...
IHI Earnings Call Summary
Earnings Call Date:Nov 06, 2024
(Q2-2024)
| % Change Since: |
Next Earnings Date:May 08, 2026
Earnings Call Sentiment Negative
The earnings call revealed significant challenges, including large one-time losses and decreased operating profit, overshadowing some growth in the Aero Engine and Defense business and stability in large plant projects.Positive Updates
Aero Engine and Defense Business Growth
The Aero Engine and Defense business saw an increase in orders totaling JPY 29.5 billion, driven by civil aero engine PW1100G and other main engine units.
Negative Updates
Significant One-Time Losses
A large one-time loss was posted due to the PW1100G engine additional inspection program and the North American process plant litigation settlement, impacting financial results significantly.
Read all updates
Q2-2024 Updates
Positive
Negative
Aero Engine and Defense Business Growth
The Aero Engine and Defense business saw an increase in orders totaling JPY 29.5 billion, driven by civil aero engine PW1100G and other main engine units.
Read all positive updates
Company Guidance
During the IHI Group's second-quarter earnings call for the fiscal year 2023, several key metrics and financial figures were discussed. The group reported a one-time loss primarily due to the PW1100G engine inspection program and North America process plant litigation settlement, leading to an operating profit of negative JPY 157 billion. Excluding special factors, the orders received were JPY 640 billion, and revenue was JPY 639 billion, with an operating profit of JPY 16 billion. The foreign exchange rate averaged JPY 140.62 to the U.S. dollar, reflecting a JPY 9 depreciation from the previous year. The company's total assets increased by JPY 111.3 billion, reaching JPY 2,053.3 billion, while interest-bearing debt rose to JPY 644.7 billion. The debt-equity ratio was 1.98x, with a 14.5% ratio of equity attributable to the owners of the parent. Operating cash flow stood at JPY 81.4 billion, while free cash flow was negative JPY 112.8 billion. The guidance emphasized the need for improving cash flow and working capital, aiming to recover to the fiscal 2022 financial foundation with a focus on enhancing profitability and maintaining dividend payouts.IHI Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
64
Positive
Cash Flow
56
Neutral
| 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
Negative
3293.00
Price Trends
3761.66
Negative
3393.88
Negative
2928.55
Positive
Market Momentum
-123.58
Negative
40.42
Neutral
44.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7013, the sentiment is Negative. The current price of 3293 is below the 20-day moving average (MA) of 3455.94, below the 50-day MA of 3761.66, and above the 200-day MA of 2928.55, indicating a neutral trend. The MACD of -123.58 indicates Negative momentum. The RSI at 40.42 is Neutral, neither overbought nor oversold. The STOCH value of 44.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7013.
IHI Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | ¥545.33B | 28.49 | 5.25% | 2.13% | -2.23% | 130.96% | |
69 Neutral | ¥2.57T | 18.60 | 10.09% | 0.97% | 5.35% | 26.51% | |
67 Neutral | ¥3.54T | 25.09 | 23.30% | 0.71% | -1.66% | 19.02% | |
66 Neutral | ¥2.33T | 13.24 | 16.00% | 1.38% | 13.96% | 12.97% | |
64 Neutral | ¥2.81T | 9.91 | 14.59% | 1.40% | 14.12% | 54.64% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | ¥636.53B | 18.29 | 4.83% | 2.95% | -2.67% | -85.21% |
* Industrials Sector Average
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IHI Corporate Events
IHI to Sell Tokyo Rental Assets, Booking ¥17.5 Billion Gain Over Two Years
Mar 27, 2026
IHI Corporation has resolved to transfer interests in land and buildings it holds as rental assets in Koto-ku, Tokyo, as part of a broader push to improve capital efficiency and reallocate capital toward growth and portfolio transformation. The as...
IHI to Sell U.S. Power Services Unit to Kyushu Electric Subsidiary
Mar 16, 2026
IHI Corporation will transfer all shares of its U.S. subsidiary IHI Power Services Corp. to Kyuden International Americas, a unit of Kyushu Electric Power’s international arm, as part of a strategic portfolio shift in its overseas carbon sol...
IHI to Absorb Subsidiary IHI Segment in Post-Divestment Reorganization
Feb 24, 2026
IHI Corporation has approved an absorption-type merger with its wholly owned consolidated subsidiary, IHI Segment Corporation, as part of a post-divestment reorganization of its construction materials business. The move follows the earlier transfe...
IHI Overhauls Executive Lineup in Planned Leadership Transition
Feb 10, 2026
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 ...
IHI Elevates Aero-Engine and Defense Chief Atsushi Sato to Representative Director
Feb 10, 2026
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 ...
IHI Outlines Q3 FY2025 Results and Ongoing Business Restructuring
Feb 10, 2026
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, inf...
IHI Posts Higher Profit Despite Lower Revenue, Keeps FY2026 Outlook Intact
Feb 10, 2026
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 ...
IHI Discloses Increase in Stake Held by Capital Research and Management Company
Feb 3, 2026
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 c...
IHI Subsidiary to Absorb Sumitomo Heavy Industries’ Mechanical Parking Business
Jan 26, 2026
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 N...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.