Exedy Corporation (7278) AI Stock Analysis

• Market Cap: ¥224.60B
• Dividend Yield: 5.39%
• Average Volume (3M): 149.57K
• Price to Earnings (P/E): 16.7
• Beta (1Y): 0.51
• Revenue Growth: -2.26%
• EPS Growth: N/A
• Country: JP
• Employees: 11,444
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 131.68
• Shares Outstanding: 48,593,735
• 10 Day Avg. Volume: 107,910
• 30 Day Avg. Volume: 149,573
• PEG Ratio: -0.06
• Price to Book (P/B): 1.02
• Price to Sales (P/S): 0.59
• P/FCF Ratio: 7.69
• 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): 384.93
• Revenue Forecast (FY): ¥302.00B

• Rating: 69 Neutral
• Price Target: ¥6,198.00 ▲(10.48% Upside)
• Action: Downgraded Date: 01/30/26
• Date: Action: Downgraded 01/30/26

The score is driven primarily by solid financial stability and strong cash generation, supported by an attractive dividend yield. Offsetting these positives are weak near-term business momentum (TTM revenue contraction) and mixed technicals with subdued short-term price strength.

Positive Factors

Strong free cash flow generation

Robust operating and free cash flow in the trailing twelve months provide enduring funding for dividends, capex and working capital without relying on new debt. Sustained FCF strengthens financial resilience and supports shareholder returns and reinvestment over the medium term.

Conservative leverage

A low debt-to-equity ratio (~0.30) gives the company financial flexibility to fund R&D, maintain production capacity, and withstand automotive cyclicality. Conservative leverage reduces refinancing risk and preserves capacity for opportunistic investment or dividend stability over coming quarters.

Profitability rebound with healthy margins

Return to net profitability and sustained gross margins indicate the core driveline business retains pricing power and cost control. Stable gross margins around 20% support operating earnings durability, helping absorb volume swings and underpinning long‑term cash generation.

Negative Factors

Top-line contraction

Material TTM revenue decline signals weakening demand or lost volumes from OEMs/aftermarket. For a supplier tied to vehicle production, prolonged top‑line contraction can erode operating leverage, pressure margins and reduce sustainable earnings and cash flow over the medium term.

Moderate returns on capital

Mid‑single‑digit ROE even after recovery suggests limited capital efficiency versus peers. Persistently modest returns constrain the company’s ability to compound shareholder value and may require higher reinvestment or structural changes to materially lift long‑term profitability.

Inconsistent cash conversion

Year‑to‑year swings in free cash flow despite profit recovery indicate potential volatility in working capital or capex timing. Inconsistent cash conversion raises uncertainty around sustainable dividend coverage and capital spending plans across automotive demand cycles.

Exedy Corporation Business Overview & Revenue Model

Company Description

EXEDY Corporation, together with its subsidiaries, manufactures and sells manual and automatic transmission vehicle parts in Japan. The company provides manual and automatic transmission parts for passenger vehicles, trucks, and buses, which include clutch covers, clutch discs, motorsports, torque converters, and AT parts. It also offers separate type power shift transmissions, retarders, and dampers discs for construction machinery; differential direct connection type power shift transmissions for industrial vehicles, such as forklifts; and dual clutches for agricultural machinery. In addition, the company provides dry type pulley centrifugal clutches, wet type centrifugal clutches, wet type multi-plate clutches with coil springs, wet type multi-plate clutches with DSPs, and one-way clutches. The company was formerly known as Daikin Manufacturing Co., Ltd and changed its name to EXEDY Corporation in 1995. EXEDY Corporation was incorporated in 1950 and is headquartered in Neyagawa, Japan.

How the Company Makes Money

Exedy Corporation generates revenue primarily through the sale of its automotive components to OEMs and aftermarket retailers. The company's revenue model is centered on manufacturing and distributing high-performance clutch systems and related products, which are critical for vehicle operation. Key revenue streams include direct sales to automobile manufacturers, partnerships with aftermarket distributors, and sales through retail channels. The company has established significant partnerships with major automotive manufacturers, which not only ensures a steady demand for its products but also enhances its market presence. Additionally, the growing trend towards performance tuning and motorsports has opened up new revenue opportunities, contributing to its earnings.

Exedy Corporation Financial Statement Overview

Summary

Overall financials are solid: profitability rebounded sharply (FY2025 returned to net profit), leverage is conservative (debt-to-equity ~0.30), and cash generation is strong with sizable TTM free cash flow. The primary risk is business momentum—revenue was flat in FY2025 and contracted materially in TTM, which could pressure earnings if it persists.

Income Statement

Profitability improved sharply versus FY2024’s loss, with FY2025 returning to a solid net profit and stronger operating earnings; TTM (Trailing-Twelve-Months) margins remain healthy (about 20% gross margin and ~4% net margin). However, growth momentum is a key concern: revenue was essentially flat in FY2025 and then contracted materially in TTM (Trailing-Twelve-Months), indicating volatility and potential demand/volume pressure. Overall, earnings quality looks improved, but the top-line trajectory is currently a clear weakness.

Balance Sheet

Leverage is conservative for the period shown, with debt-to-equity around ~0.30 in FY2025/TTM (Trailing-Twelve-Months), suggesting manageable balance-sheet risk. Equity remains substantial relative to assets, supporting financial flexibility. The main drawback is returns: while FY2025/TTM (Trailing-Twelve-Months) improved to a mid‑single-digit return on equity after a negative FY2024, it is still not especially high, implying moderate efficiency in converting capital into profits.

Cash Flow

Cash generation is a standout: operating cash flow and free cash flow are strong in TTM (Trailing-Twelve-Months), and free cash flow also grew meaningfully versus the prior annual period. Free cash flow is sizable relative to reported earnings, supporting earnings durability. The watch item is consistency—FY2025 free cash flow declined versus FY2024 despite positive profits, so cash conversion can fluctuate year to year.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	302.63B	309.56B	308.34B	285.64B	261.10B	227.42B
Gross Profit	61.28B	59.43B	53.85B	44.77B	47.94B	40.33B
EBITDA	37.35B	36.77B	7.07B	30.76B	39.79B	28.54B
Net Income	13.66B	12.74B	-10.02B	4.59B	12.48B	4.98B
Balance Sheet
Total Assets	313.79B	303.91B	321.94B	331.88B	332.79B	312.74B
Cash, Cash Equivalents and Short-Term Investments	70.31B	68.16B	76.15B	61.69B	57.38B	53.34B
Total Debt	54.74B	56.29B	29.98B	33.65B	37.91B	42.27B
Total Liabilities	110.00B	109.64B	88.40B	91.97B	96.76B	96.01B
Stockholders Equity	188.75B	180.48B	218.55B	225.56B	221.76B	203.93B
Cash Flow
Free Cash Flow	33.49B	23.93B	28.13B	14.78B	13.63B	13.11B
Operating Cash Flow	41.20B	31.50B	37.61B	27.22B	28.43B	30.11B
Investing Cash Flow	-9.25B	-8.72B	-13.41B	-12.79B	-15.49B	-16.77B
Financing Cash Flow	-34.65B	-28.72B	-11.41B	-11.18B	-10.54B	-8.45B

Exedy Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5610.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7278, the sentiment is Positive. The current price of 5610 is below the 20-day moving average (MA) of 5985.00, below the 50-day MA of 5826.60, and above the 200-day MA of 5073.25, indicating a bullish trend. The MACD of 101.24 indicates Negative momentum. The RSI at 63.37 is Neutral, neither overbought nor oversold. The STOCH value of 77.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7278.

Exedy Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7242	78 Outperform	¥258.35B	7.94	12.15%	2.87%	3.95%	136.86%
7283	77 Outperform	¥140.89B	9.89	―	3.30%	0.29%	9.87%
7296	74 Outperform	¥183.77B	12.58	―	4.47%	2.01%	25.09%
7220	71 Outperform	¥202.90B	106.69	―	1.93%	-3.23%	24.93%
7278	69 Neutral	¥224.60B	16.66	6.56%	5.39%	-2.26%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Exedy Corporation Corporate Events

EXEDY Lifts Dividend as Profits Climb Despite Softer FY2025 Sales

EXEDY Corporation reported consolidated revenue of ¥226.4 billion for the first nine months of FY2025, down 3.0% year on year, but achieved higher profitability, with operating profit up 3.4% to ¥16.7 billion and profit attributable to owners of the parent rising 9.0% to ¥11.1 billion; total comprehensive income jumped 24.6%, and the equity ratio improved slightly to 60.2%, reflecting a stronger balance sheet despite softer top-line performance. The company raised its full-year dividend outlook to a total of ¥300 per share, up from ¥250 in the previous year, and forecasts FY2025 revenue of ¥300 billion (down 3.1%) with modest growth in operating profit and profit attributable to owners of the parent, signaling management’s confidence in earnings resilience and shareholder returns even in a weaker sales environment.

The most recent analyst rating on (JP:7278) stock is a Buy with a Yen6687.00 price target. To see the full list of analyst forecasts on Exedy Corporation stock, see the JP:7278 Stock Forecast page.

Exedy Overhauls Governance With Shift to Nominating Committee Structure

Exedy Corporation will transition from a company with a board of corporate auditors to a company with a nominating committee, subject to shareholder approval at the June 2026 ordinary general meeting, in a bid to accelerate decision-making and strengthen management transparency. The move will formalize three statutory committees—nominating, compensation, and audit—with independent outside directors forming the majority, thereby clarifying the separation between supervisory and executive functions, reinforcing board oversight, and aligning the governance structure more closely with global best practices; associated changes include the reclassification of current directors into the new structure, the retirement of existing corporate auditors, and the appointment of executive officers, including elevating President and CEO Tetsuya Yoshinaga to Director, Representative Executive Officer and promoting Hiroshi Toyohara to Director, Representative Executive Officer and Executive Vice President.

The most recent analyst rating on (JP:7278) stock is a Buy with a Yen6687.00 price target. To see the full list of analyst forecasts on Exedy Corporation stock, see the JP:7278 Stock Forecast page.

Exedy Lifts Full-Year Profit Outlook and Commits to Aggressive Payout Policy

Exedy Corporation reported that third-quarter net sales declined, mainly due to lower orders for automatic transmission products in the Americas and Japan and adverse foreign exchange effects, but operating profit rose, supported by the exit from an unprofitable U.S. subsidiary, stronger sales in China and other Asian markets, and successful price pass-through to offset cost inflation and higher human capital expenses. On the back of a weaker-than-expected yen and stronger operating performance through the third quarter, the company raised its full-year operating profit forecast from JPY 21.0 billion to JPY 22.0 billion and outlined a shareholder return policy targeting a 100% total payout ratio over fiscal 2025–2026, a minimum DOE of 5%, and continued stable dividends to support an optimal capital structure with an equity ratio goal of 60%.

The most recent analyst rating on (JP:7278) stock is a Buy with a Yen6687.00 price target. To see the full list of analyst forecasts on Exedy Corporation stock, see the JP:7278 Stock Forecast page.

EXEDY Upgrades Full-Year Earnings Outlook on Weaker Yen and Strong Q3

EXEDY Corporation has raised its full-year consolidated earnings forecast for the fiscal year ending March 31, 2026, citing a weaker-than-expected yen and stronger-than-forecast third-quarter results. The company now expects revenue of ¥300 billion, operating profit of ¥22 billion, profit before tax of ¥22.5 billion, and profit attributable to owners of parent of ¥13.5 billion, all modestly higher than its previous outlook and above the prior year’s profit levels, signaling improved profitability and a favorable currency tailwind despite ongoing uncertainty in the global economy.

The most recent analyst rating on (JP:7278) stock is a Buy with a Yen6687.00 price target. To see the full list of analyst forecasts on Exedy Corporation stock, see the JP:7278 Stock Forecast page.

Exedy Raises ROE Ambitions in Updated Capital Efficiency and Valuation Strategy

Exedy Corporation announced an update to its cost of capital and stock price‑conscious management initiative following a Board of Directors meeting on December 23, 2025. Building on its mid- to long-term strategy launched in April 2024 and a prior October 2024 announcement, the company has reanalyzed its current position and decided to accelerate and raise its medium- to long-term ROE targets while further refining business, financial, ESG and investor relations strategies. The update reflects ongoing dialogue with seven major shareholders and other investors about enhancing corporate value over the medium to long term, and signals a renewed focus on achieving an optimal capital structure and improving capital profitability, which could strengthen Exedy’s market valuation and alignment with shareholder expectations.

The most recent analyst rating on (JP:7278) stock is a Buy with a Yen6093.00 price target. To see the full list of analyst forecasts on Exedy Corporation stock, see the JP:7278 Stock Forecast page.