SUBARU (7270) AI Stock Analysis

• Market Cap: ¥1.79T
• Dividend Yield: 3.61%
• Average Volume (3M): 2.90M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.31
• Revenue Growth: 1.04%
• EPS Growth: -31.52%
• Country: JP
• Employees: 37,693
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Manufacturers
• EPS (TTM): -9.52
• Shares Outstanding: 717,335,270
• 10 Day Avg. Volume: 2,964,950
• 30 Day Avg. Volume: 2,896,690
• PEG Ratio: -0.57
• Price to Book (P/B): 0.72
• Price to Sales (P/S): 0.42
• P/FCF Ratio: 6.08
• 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: ¥3,065.52
• Price Target Upside: 22.79% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 6
• EPS Forecast (FY): 204.6
• Revenue Forecast (FY): ¥4.76T

• Rating: 58 Neutral
• Price Target: ¥2,661.00 ▲(6.59% Upside)
• Action: Reiterated Date: 02/10/26
• Date: Action: Reiterated 02/10/26

The score is driven primarily by weakening TTM profitability and a sharp drop in free cash flow, partially offset by a low-leverage balance sheet. Technically, the stock shows bearish trend signals (below major moving averages with negative MACD), while valuation is mixed with a strong dividend yield but a moderately high P/E.

Positive Factors

Low leverage / strong balance sheet

Subaru's very low debt-to-equity (around 0.15) and stable equity base provide durable financial flexibility. This reduces refinancing risk during auto cycles, supports investment in electrification and aerospace projects, and preserves capacity for dividends or opportunistic M&A.

Positive free cash flow

Sustained positive operating cash flow and FCF give Subaru internal funding for capex, product development and shareholder returns. Even with a recent decline, positive FCF reduces reliance on external financing and supports long-term investments in EVs and manufacturing resilience.

Diversified industrial footprint

A dual automotive and aerospace business mix diversifies revenue and technological capabilities. Aerospace contracts can provide steadier, higher‑visibility backlog and engineering know‑how transferrable to vehicle manufacturing, lowering cyclicality and supporting long-term R&D synergies.

Negative Factors

Compressed profitability margins

Sharp margin compression materially reduces internal cash generation and return on capital. Persistently lower EBIT and net margins weaken the firm's cushion against raw material or pricing shocks, constrain reinvestment in EV platforms, and limit ability to expand high‑margin businesses.

Sharp decline in free cash flow

A roughly 56.6% fall in FCF signals operational or working capital strains that reduce available funding for capex, R&D and dividends. The drop raises medium‑term funding risk and could force management to reprioritize investments, slowing electrification and product refresh programs.

Weak top-line and earnings growth

A contraction in revenue combined with a large EPS decline (Fundamentals EPS growth ~ -74%) undermines scale advantages and pricing power. Slower sales growth makes it harder to absorb fixed costs, threatens future margin recovery, and reduces funds available for strategic initiatives.

SUBARU Business Overview & Revenue Model

Company Description

Subaru Corporation manufactures and sells automobiles and aerospace products worldwide. It operates through three segments: Automotive Business Unit, Aerospace Company, and Other Businesses. The company manufactures, sells, and repairs passenger cars and their components, airplanes, aerospace-related machinery, and related components; and rents and manages real estate properties. It is also involved in the shipping, land freight, and warehousing of vehicles; leasing and rental of vehicles; credit and financing of vehicles; inspection, service, and maintenance of aircrafts; and IT system development and operation services. The company was formerly known as Fuji Heavy Industries Ltd. and changed its name to Subaru Corporation in April 2017. Subaru Corporation was founded in 1917 and is headquartered in Tokyo, Japan.

How the Company Makes Money

SUBARU primarily makes money through its automotive business by selling new vehicles to distributors/dealers (and, depending on market structure, through wholesale sales to regional distributors and retail sales via dealer networks). Automotive revenue is driven by vehicle model mix, production volume, pricing/incentives, foreign-exchange effects, and geographic sales mix (notably the U.S. market). In addition to new-vehicle sales, SUBARU earns revenue from supplying parts and accessories (including genuine parts), service-related items, and potentially licensing/technology-related income where applicable; however, specific breakdowns or program details are not available here (null). The company also generates revenue from its aerospace segment through manufacturing and supplying aircraft-related components/structures and providing contract manufacturing/engineering services for aerospace programs; specific customer/program partnerships are not available here (null). Profitability is influenced by manufacturing efficiency, raw material and logistics costs, warranty/recall costs, and investments in product development and electrification, as well as the performance of overseas subsidiaries and consolidated sales channels.

SUBARU Financial Statement Overview

Summary

Balance sheet strength is a key positive (low leverage with ~0.15 debt-to-equity), supporting resilience. However, TTM profitability has weakened sharply (net margin ~2.2% vs ~7.2% prior; EBIT margin ~3.7% vs ~10.6%), and free cash flow fell materially (about -56.6%), indicating near-term earnings and cash-flow pressure.

Income Statement

Profitability has weakened meaningfully in TTM (Trailing-Twelve-Months) versus the last annual period: net margin fell to ~2.2% (from ~7.2%), and EBIT margin compressed to ~3.7% (from ~10.6%). Revenue is slightly down in TTM (about -2.8%), after several years of strong top-line expansion through 2024. Positives include still-positive operating profitability and historically better margins in the 2023–2025 annual run-rate, but the sharp TTM step-down points to near-term earnings pressure and reduced cushion against industry cyclicality.

Balance Sheet

Leverage looks conservative for an auto manufacturer, with debt-to-equity around ~0.15 in both TTM (Trailing-Twelve-Months) and the latest annual period, supporting balance-sheet resilience. Equity has grown over the multi-year period, and total debt has been broadly stable. The main weakness is profitability on equity cooling in TTM (~3.8%) versus the strong 2024–2025 annual levels, which suggests the balance sheet is solid but currently generating less return.

Cash Flow

Cash generation remains positive in TTM (Trailing-Twelve-Months) with operating cash flow of ~¥360B and free cash flow of ~¥151B, but free cash flow has dropped sharply (about -56.6% growth). Cash conversion has also softened, with free cash flow running at ~42% of net income in TTM (down from ~46–61% in prior annual periods). The positives are continued positive free cash flow and generally healthy cash generation in recent years, but the magnitude of the TTM decline raises concern about near-term volatility in funding capacity for capex, dividends, or buybacks.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	4.67T	4.69T	4.70T	3.77T	2.74T	2.83T
Gross Profit	733.13B	941.49B	956.75B	703.00B	473.49B	465.14B
EBITDA	420.45B	649.70B	699.83B	519.87B	321.26B	314.89B
Net Income	103.74B	338.06B	385.08B	200.43B	70.01B	76.51B
Balance Sheet
Total Assets	5.24T	5.09T	4.81T	3.94T	3.54T	3.41T
Cash, Cash Equivalents and Short-Term Investments	857.79B	941.46B	1.05T	1.37T	1.13T	1.14T
Total Debt	413.00B	530.34B	523.35B	427.12B	441.17B	435.53B
Total Liabilities	2.49T	2.37T	2.25T	1.83T	1.64T	1.63T
Stockholders Equity	2.75T	2.71T	2.56T	2.10T	1.89T	1.78T
Cash Flow
Free Cash Flow	150.87B	321.27B	579.52B	368.76B	94.40B	164.65B
Operating Cash Flow	359.67B	492.14B	767.66B	503.76B	195.65B	289.38B
Investing Cash Flow	-287.81B	-404.77B	-709.03B	-336.81B	-179.72B	-272.17B
Financing Cash Flow	-176.58B	-186.63B	-61.14B	-122.31B	-98.50B	13.97B

SUBARU Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2496.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7270, the sentiment is Negative. The current price of 2496.5 is below the 20-day moving average (MA) of 2764.85, below the 50-day MA of 3103.38, and below the 200-day MA of 3030.06, indicating a bearish trend. The MACD of -151.92 indicates Positive momentum. The RSI at 27.06 is Positive, neither overbought nor oversold. The STOCH value of 13.65 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7270.

SUBARU Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7203	68 Neutral	¥42.37T	8.70	12.89%	2.78%	6.44%	11.88%
7211	66 Neutral	¥490.20B	26.18	-0.65%	3.33%	-0.87%	-105.50%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7267	59 Neutral	¥5.00T	9.73	4.09%	4.41%	-0.43%	-26.68%
7270	58 Neutral	¥1.79T	-82.83	9.73%	3.61%	1.04%	-31.52%
7261	55 Neutral	¥668.29B	6.29	1.72%	4.52%	-0.83%	-75.20%
7201	47 Neutral	¥1.16T	-12.05	-16.69%	―	-3.01%	-755.71%

SUBARU Corporate Events

Subaru Cuts Profit Outlook for FY2026 Despite Higher Revenue Forecast

Subaru Corporation has revised its consolidated financial forecast for the fiscal year ending March 31, 2026, projecting higher revenue of ¥4.8 trillion but significantly lower profitability than previously expected, with operating profit, profit before tax, and profit attributable to owners of the parent all reduced by around 22–35%. The downgrade reflects the impact of additional tariffs and rising expenses, which have already led to a net loss in the third quarter, signaling margin pressure despite top-line growth and suggesting a more challenging earnings environment for the automaker, although the company is maintaining its dividend forecast for the period.

The most recent analyst rating on (JP:7270) stock is a Buy with a Yen4800.00 price target. To see the full list of analyst forecasts on SUBARU stock, see the JP:7270 Stock Forecast page.

Subaru Profit Plunges Despite Steady Sales as FY2026 Outlook Is Cut

Subaru reported nine-month revenue to December 31, 2025 of ¥3.52 trillion, essentially flat year-on-year, but saw operating profit plunge 82% to ¥66.3 billion and profit attributable to owners fall 73.8% to ¥83.1 billion, sharply compressing margins and earnings per share. Despite the profit slump, equity attributable to owners remained robust at ¥2.75 trillion, with an equity ratio of 52.5%, and the company maintained its annual dividend forecast of ¥115 per share, including a higher interim payout of ¥57, signaling continued shareholder returns. For the full year to March 31, 2026, Subaru cut its earnings outlook, now expecting revenue of ¥4.8 trillion but forecasting steep year-on-year declines in operating profit (down 67.9%) and net profit (down 63.0%), highlighting sustained profit pressure; it also streamlined its domestic dealer network by integrating ten regional sales subsidiaries, potentially improving efficiency but temporarily reducing the scope of consolidation.

The most recent analyst rating on (JP:7270) stock is a Buy with a Yen4800.00 price target. To see the full list of analyst forecasts on SUBARU stock, see the JP:7270 Stock Forecast page.

Subaru Overhauls Governance and Board Structure to Support Management Policy 2025

Subaru Corporation announced a broad reorganization of its governance structure, including organizational and management changes and a reshaping of its Board of Directors, to take effect in April and June 2026, subject to shareholder approval. As part of this shift, Subaru will transition to a “Company with an Audit and Supervisory Committee” to speed up decision-making, delegate more authority to management, and strengthen the Board’s supervisory role, measures intended to support steady execution of its SUBARU Management Policy 2025 and enhance corporate value over the medium to long term. The proposed board slate includes Fumiaki Hayata as Representative Director and Chairman of the Board, Atsushi Osaki continuing as Representative Director of the Board, and several continuing and newly appointed outside directors, such as newly nominated independent outside director Kayako Omura, with outside directors taking key roles on the Governance & Executive Nomination and Executive Compensation committees to reinforce independent oversight.

The most recent analyst rating on (JP:7270) stock is a Buy with a Yen4800.00 price target. To see the full list of analyst forecasts on SUBARU stock, see the JP:7270 Stock Forecast page.

Subaru to Overhaul Governance Structure with Audit and Supervisory Committee

Subaru Corporation has resolved to transition from a company with an Audit and Supervisory Board to a company with an Audit and Supervisory Committee, subject to shareholder approval at its June 2026 general meeting, as part of broader efforts to strengthen corporate governance and support its “SUBARU Management Policy 2025.” The new structure will delegate more authority over business execution to executive officers to speed decision-making, while increasing the supervisory role of the Board of Directors, which will comprise a majority of Independent Outside Directors and a strengthened Audit and Supervisory Committee, and will maintain key voluntary governance bodies with independent outside directors as chairs, signaling a clear move to tighter oversight and enhanced transparency for investors and other stakeholders.

The most recent analyst rating on (JP:7270) stock is a Buy with a Yen4800.00 price target. To see the full list of analyst forecasts on SUBARU stock, see the JP:7270 Stock Forecast page.

Subaru Completes ¥50 Billion Share Buyback and Announces Share Cancellation

Subaru Corporation has completed a share repurchase program authorized in August 2025, buying back 15,722,200 common shares for a total of approximately ¥49.99 billion through market purchases on the Tokyo Stock Exchange between August 8 and December 23, 2025. The company will cancel all of these repurchased shares—equivalent to 2.1% of its outstanding stock—on January 20, 2026, reducing the total number of shares outstanding to 717,335,273 and signaling an ongoing commitment to shareholder returns and capital efficiency, which may support earnings per share and improve capital structure for investors.

The most recent analyst rating on (JP:7270) stock is a Buy with a Yen3892.00 price target. To see the full list of analyst forecasts on SUBARU stock, see the JP:7270 Stock Forecast page.