Daido Metal Co., Ltd. (7245) AI Stock Analysis

• Market Cap: ¥57.32B
• Dividend Yield: 2.09%
• Average Volume (3M): 890.26K
• Price to Earnings (P/E): 15.6
• Beta (1Y): 1.05
• Revenue Growth: 1.26%
• EPS Growth: 56.37%
• Country: JP
• Employees: 7,055
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 16.56
• Shares Outstanding: 47,520,252
• 10 Day Avg. Volume: 481,900
• 30 Day Avg. Volume: 890,263
• PEG Ratio: 1.46
• Price to Book (P/B): 0.32
• Price to Sales (P/S): 0.17
• P/FCF Ratio: 68.09
• 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: 65 Neutral
• Price Target: ¥1,210.00 ▲(30.11% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by improving financial performance (better margins and reduced leverage) but constrained by thin net profitability and volatile/weak free-cash-flow conversion. Technicals are supportive with a clear uptrend and positive momentum, while valuation is reasonable with a mid-range P/E and modest yield.

Positive Factors

Margin improvement

Trailing improvements to gross and operating margins (TTM gross ~25.3%, EBIT ~7.0%) indicate better pricing, cost control and manufacturing efficiency. Sustained margins enhance resilience to input-cost volatility and support reinvestment capacity over the medium term.

Improved leverage

Reduction in debt-to-equity to ~0.89 from prior ~1.01–1.04 materially improves financial flexibility. Lower leverage reduces interest burden and increases capacity for targeted capex or working-capital smoothing, supporting durable operations across business cycles.

OEM + industrial end markets

Core sales to automakers and industrial equipment manufacturers create recurring, contract-driven demand tied to platform production and aftermarket replacement. Long-term OEM relationships and diverse industrial use cases support stable order visibility and steady product demand.

Negative Factors

Thin net profitability

Net margins near 2.9% and ROE around 5.4% leave limited buffer for shocks and reduce internal capital generation. Thin bottom-line profitability constrains ability to fund growth, rewards shareholders, or absorb prolonged cost inflation without margin recovery or product-mix improvement.

Volatile free cash flow

Free cash flow has been uneven—TTM roughly ¥3.3B but very low in FY2025 and negative in FY2023—making capital allocation and dividend consistency less predictable. Cash conversion volatility raises risk that working-capital needs or reinvestment pressure will constrain flexibility.

Cyclical demand exposure

Sales are closely tied to automotive production and industrial equipment cycles, exposing revenue and margins to capital-spending swings. This structural cyclicality makes earnings and cash generation sensitive to macro and industry downcycles, limiting visibility over multi-quarter horizons.

Daido Metal Co., Ltd. Business Overview & Revenue Model

Company Description

Daido Metal Co., Ltd. (7245) is a leading manufacturer specializing in high-performance bearing materials and components, primarily serving the automotive and industrial machinery sectors. The company is known for its innovative products, including bushings, bearings, and other friction-reducing materials, which are essential in enhancing the efficiency and longevity of various mechanical applications. With a strong focus on research and development, Daido Metal emphasizes quality and technology in its manufacturing processes.

How the Company Makes Money

Daido Metal generates revenue primarily through the sale of its bearing products to original equipment manufacturers (OEMs) in the automotive sector and industrial machinery markets. Its revenue model is driven by long-term contracts with major automotive manufacturers, providing a steady stream of income. Key revenue streams include the production and supply of custom-engineered bearings and bushings, which are critical for vehicle performance and durability. Additionally, the company benefits from ongoing partnerships and collaborations with automotive and industrial companies that require specialized bearing solutions. Factors contributing to its earnings include ongoing demand for automotive components, advancements in manufacturing technology, and a focus on expanding its product offerings to meet evolving industry requirements.

Daido Metal Co., Ltd. Financial Statement Overview

Summary

Earnings recovery and margin improvement support the score (TTM EBIT margin ~7.0% and gross margin ~25.3%), and leverage has improved (debt-to-equity ~0.89). Offsetting this are still-thin net margins (~2.9%), modest ROE (~5.4%), and volatile cash conversion with low/uneven free cash flow (TTM FCF ~¥3.3B; ~19% of net income).

Income Statement

Profitability and momentum have improved meaningfully into TTM (Trailing-Twelve-Months): revenue is up ~3.5% and net income rose to ~¥3.7B, with operating profitability stronger than prior years (EBIT margin ~7.0% vs ~6.2% in FY2025 and ~2.4% in FY2023). Gross margin also improved to ~25.3% in TTM. The main weakness is still thin bottom-line profitability (net margin ~2.9%) and a history of volatility, including a net loss in FY2023, which tempers the quality and durability of earnings.

Balance Sheet

Leverage is moderate for an auto-parts supplier: total debt is ~¥68B against equity of ~¥76B in TTM (debt-to-equity ~0.89), an improvement versus the ~1.01–1.04 range in FY2021–FY2023. Asset base has also grown alongside equity. That said, returns remain modest (TTM return on equity ~5.4%), indicating the balance sheet is not yet producing strong shareholder returns and leverage still limits flexibility if margins soften.

Cash Flow

Cash generation is positive but not especially strong relative to earnings: TTM operating cash flow is ~¥12.5B and free cash flow ~¥3.3B, with a sharp rebound in free cash flow growth versus the prior year. However, free cash flow remains a relatively small portion of net income in TTM (about 19%), and free cash flow was extremely low in FY2025 and negative in FY2023—highlighting volatility and the risk that reinvestment needs or working-capital swings can pressure cash conversion.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	140.26B	136.30B	128.74B	115.48B	104.02B	84.72B
Gross Profit	34.90B	32.17B	31.30B	26.17B	26.76B	19.52B
EBITDA	20.15B	18.79B	16.46B	12.77B	15.01B	11.65B
Net Income	3.71B	2.72B	2.57B	-2.21B	1.90B	104.00M
Balance Sheet
Total Assets	203.84B	196.66B	188.37B	173.32B	166.16B	155.18B
Cash, Cash Equivalents and Short-Term Investments	29.38B	29.15B	30.96B	24.11B	23.02B	22.01B
Total Debt	68.24B	65.79B	63.38B	61.93B	57.13B	58.47B
Total Liabilities	118.19B	114.56B	109.65B	102.87B	97.46B	90.64B
Stockholders Equity	76.19B	72.75B	68.82B	61.13B	60.34B	56.39B
Cash Flow
Free Cash Flow	3.33B	342.00M	8.67B	-162.00M	6.27B	1.84B
Operating Cash Flow	12.54B	10.92B	16.66B	5.00B	13.21B	10.10B
Investing Cash Flow	-6.49B	-8.39B	-8.30B	-6.34B	-8.07B	-7.04B
Financing Cash Flow	-2.21B	-2.39B	-2.50B	790.00M	-5.08B	-3.10B

Daido Metal Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 930.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7245, the sentiment is Positive. The current price of 930 is below the 20-day moving average (MA) of 1120.40, below the 50-day MA of 1060.04, and above the 200-day MA of 878.61, indicating a bullish trend. The MACD of 37.95 indicates Negative momentum. The RSI at 71.25 is Negative, neither overbought nor oversold. The STOCH value of 90.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7245.

Daido Metal Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5185	77 Outperform	¥30.01B	12.88	―	4.20%	-1.15%	-34.09%
7229	71 Outperform	¥45.12B	10.60	―	2.37%	-13.35%	-19.38%
7236	71 Outperform	¥62.90B	6.61	―	3.60%	0.14%	882.91%
7245	65 Neutral	¥57.32B	15.57	5.33%	2.09%	1.26%	56.37%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
5989	61 Neutral	¥41.66B	4.81	―	5.16%	-11.67%	―
6470	51 Neutral	¥32.17B	130.91	―	2.45%	4.93%	―

Daido Metal Co., Ltd. Corporate Events

Daido Metal lifts profit and dividend outlook on gain from sale of investment securities

Daido Metal Co., Ltd. said it will book about ¥1.06 billion in extraordinary income from the sale of five listed investment securities between September 2025 and March 2026. The move is aimed at reducing policy shareholdings, improving capital efficiency and strengthening its financial position, and part of the gain has already been recognized in second-quarter results.

Reflecting this gain, the company left its full-year forecasts for sales and operating profit unchanged but raised its projection for profit attributable to owners of the parent by ¥500 million to ¥4.0 billion, implying a 14.3% increase versus its previous outlook. Daido Metal also upgraded its year-end dividend forecast from ¥12 to ¥16 per share, lifting the expected annual dividend to ¥28, signaling a stronger payout to shareholders compared with the prior fiscal year.

The most recent analyst rating on (JP:7245) stock is a Buy with a Yen1199.00 price target. To see the full list of analyst forecasts on Daido Metal Co., Ltd. stock, see the JP:7245 Stock Forecast page.

Daido Metal Lifts FY2025 Q3 Profitability on Modest Sales Growth

Daido Metal Co., Ltd. reported consolidated net sales of ¥103.39 billion for the first nine months of FY2025, a year-on-year increase of 4.0%, reflecting stable demand and modest top-line growth. Operating profit rose to ¥5.87 billion, lifting the operating margin to 5.7%, while ordinary profit and profit attributable to owners of parent also improved, indicating stronger profitability.

The company’s net profit margin expanded to 2.4%, and annualized return on equity climbed to 4.4%, underscoring more efficient capital utilization. Net interest-bearing debt increased slightly to ¥40.33 billion, but the net assets to total assets ratio also improved to 37.4%, suggesting a moderately stronger balance sheet as Daido Metal navigates currency movements in U.S. dollar and euro markets.

The most recent analyst rating on (JP:7245) stock is a Buy with a Yen1199.00 price target. To see the full list of analyst forecasts on Daido Metal Co., Ltd. stock, see the JP:7245 Stock Forecast page.

Daido Metal Lifts Profit Outlook and Dividends on Strong Nine-Month Results

Daido Metal reported consolidated net sales of ¥103.4 billion for the nine months to December 31, 2025, up 4.0% year on year, with operating profit rising 27.7% to ¥5.9 billion and profit attributable to owners of parent jumping 67.1% to ¥2.5 billion. The stronger earnings lifted basic EPS to ¥52.39 and helped push total assets to ¥203.8 billion and the equity ratio to 37.4%, reflecting an improved financial position.

The company raised its full-year dividend forecast, now planning a total of ¥28 per share for the year ending March 31, 2026, compared with ¥18 in the prior year, signaling growing shareholder returns. It also revised its full-year earnings outlook, projecting ¥134.0 billion in net sales, ¥8.0 billion in operating profit, and a 47.0% increase in full-year profit attributable to owners to ¥4.0 billion, underscoring confidence in sustained profit growth.

The most recent analyst rating on (JP:7245) stock is a Buy with a Yen1199.00 price target. To see the full list of analyst forecasts on Daido Metal Co., Ltd. stock, see the JP:7245 Stock Forecast page.