Itochu (8001) AI Stock Analysis

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Itochu

(OTC:8001)

Rating:78Outperform

Price Target:

¥9,952.00

▲(14.88% Upside)

Itochu's strong financial performance and bullish technical indicators are the most significant factors contributing to the score. The company's robust cash flow and liquidity, combined with positive market momentum, position it well. The valuation is reasonable, adding to its investment appeal.

Itochu (8001) vs. iShares MSCI Japan ETF (EWJ)

Market Cap

¥12.56T

Dividend Yield2.31%

Average Volume (3M)2.58M

Price to Earnings (P/E)13.0

Beta (1Y)1.06

Revenue Growth2.83%

EPS Growth22.27%

CountryJP

Employees113,733

SectorIndustrials

Sector Strength73

IndustryConglomerates

Share Statistics

EPS (TTM)200.50

Shares Outstanding1,584,889,500

10 Day Avg. Volume2,677,700

30 Day Avg. Volume2,579,203

Financial Highlights & Ratios

PEG Ratio0.99

Price to Book (P/B)1.71

Price to Sales (P/S)0.67

P/FCF Ratio12.26

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

¥9,055.27

Price Target Upside4.53% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Itochu Business Overview & Revenue Model

Company DescriptionITOCHU Corporation engages in trading and importing/exporting various products worldwide. The company's Textile segment produces and sells fiber and garment materials, textiles fabrics, apparel, and industrial materials; and imports lifestyle brands, fashion accessories, and garments in various areas, such as luxury, casual, and sports. Its Machinery segment provides engineering, procurement, and construction services; operates water and environmental, infrastructure, renewable energy, oil and gas, petrochemical, and independent power producer projects and plants; sells and leases aircraft and related equipment; sells automobiles, construction machinery, electronic systems, industrial machinery, and medical devices; and owns and charters ships. The company's Metals & Minerals segment engages in mining and trading of iron ore, coal, uranium, base metals, and minor metals; trading in non-ferrous metal materials; and processing and trading in steel products. Its Energy & Chemicals segment trades in crude oil, petroleum products, LPG, LNG, natural gas, hydrogen, organic and inorganic chemicals, synthetic resins, household goods, fine chemicals, pharmaceuticals, and electronic materials, as well as generates and trades in power. The company's Food segment produces, distributes, and retails food products. Its General Products & Realty segment produces and sells paper, pulp, natural rubber, tire, and wood products and materials; develops and operates real estate properties, such as housing, logistics facilities, and other projects; and offers logistics services. The company's ICT & Financial Business segment offers IT solutions, Internet related and venture capital services, mobile telephone equipment and services, BPO, broadcasting and communications, entertainment and content services, outsourcing services for healthcare and preventive medicine, and financial and insurance brokerage services. The company was founded in 1858 and is headquartered in Tokyo, Japan.

How the Company Makes MoneyItochu Corporation generates revenue through its multifaceted business model, which includes trading, investment, and business development. The company earns money by facilitating the import and export of goods across its various divisions, leveraging its extensive network to source, distribute, and market products. Itochu's investments in key industries such as energy, natural resources, and technology also contribute significantly to its earnings. Additionally, the company forms strategic partnerships and joint ventures to expand its market presence and diversify its portfolio, further enhancing its revenue streams. Itochu's ability to adapt to market trends and its focus on sustainable business practices also play a crucial role in its financial success.

Itochu Earnings Call Summary

Earnings Call Date:Aug 01, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Nov 05, 2025

Earnings Call Sentiment Positive

The earnings call presented a generally positive outlook, with strong financial performance in key sectors, record-high cash flows, and continued shareholder returns. However, some challenges remain in specific segments such as Metals & Minerals, Energy & Chemicals, and General Products & Realty, which experienced profit declines.

Q2-2025 Updates

Positive Updates

Increase in Consolidated Net Profit

Consolidated net profit increased by 6% or ¥25.5 billion year-on-year to ¥438.4 billion, achieving 50% of the annual forecast.

Core Profit Achievement

Core profit reached ¥396 billion, maintaining the second highest profit level after FYE2023, with a 3% growth year-on-year.

Record-High Core Operating Cash Flows

Core operating cash flows exceeded ¥500 billion for the first time on a half-year basis, reaching ¥513 billion, setting a new all-time high.

Strong Performance in Key Segments

Textile, Machinery, Food, The 8th, and Others saw an increase in profit compared to the same period of the previous fiscal year.

Shareholder Returns and Dividend Increase

Dividend per share increased to ¥200, marking the 10th consecutive year of dividend increases, along with share buybacks of ¥150 billion.

Negative Updates

Metals & Minerals Profit Decline

Profit in Metals & Minerals declined due to deteriorating profitability in Marubeni Itochu Steel's North American business and operational issues in coking coal companies.

Energy & Chemicals Profit Decrease

Despite steady performance in chemicals, profit decreased significantly due to the absence of large extraordinary gains from the previous fiscal year.

General Products & Realty Profit Drop

Profit decreased due to the downturn in North American construction demand and higher costs affecting the North American construction materials business.

Company Guidance

During the first half of FYE2025, Itochu Corporation reported a 6% year-on-year increase in consolidated net profit, reaching ¥438.4 billion and achieving 50% of its annual forecast. Core profit rose by ¥12.5 billion to ¥396 billion, marking the second-highest level after FYE2023. Operating cash flows set a record at ¥578.6 billion, driven by stable performance in sectors like The 8th, Machinery, and Food. Core operating cash flows also hit a new high at ¥513 billion. Despite challenges in the resource sector, the company offset negative impacts with strong performances in non-resource sectors and a weaker yen, maintaining a robust profit level. Total shareholders' equity increased by approximately ¥170 billion to ¥5.6 trillion, and the NET DER improved slightly to 0.47x. The company maintained its commitment to shareholder returns with a total payout ratio of 50% and a dividend per share of ¥200, alongside a significant share buyback initiative of ¥150 billion. Looking ahead, Itochu aims to enhance its profit base through growth investments while maintaining a strong financial foundation.

Itochu Financial Statement Overview

Summary

Itochu exhibits strong financial health with robust revenue and profit growth, supported by effective cost management and profitability. The balance sheet reflects a solid foundation with manageable leverage and effective equity utilization. Cash flows are healthy, ensuring liquidity and operational efficiency. Overall, Itochu is well-positioned within the conglomerates industry, demonstrating stability and growth potential with some leverage considerations.

Income Statement

Very Positive

Itochu has demonstrated strong revenue growth with a consistent upward trend over the past years, reaching ¥14.7 trillion in 2025 from ¥10.3 trillion in 2021. The gross profit margin remains healthy, indicating efficient cost management. Net profit margin shows a positive trend, reflecting increased profitability. However, EBIT margin has slightly decreased, suggesting a potential rise in operating expenses. Overall, the company has shown strong growth and profitability in its income statement.

Balance Sheet

Positive

The balance sheet of Itochu presents a solid financial foundation, with a healthy equity ratio of 38% in 2025, improved from 29.7% in 2021. The debt-to-equity ratio has been managed well, though it remains relatively high, indicating moderate leverage. The return on equity is robust, suggesting effective use of equity to generate profits. Stability in assets and equity over the period reflects financial strength, albeit with some concerns over leveraging.

Cash Flow

Positive

Itochu's cash flows show a positive trend, with consistent free cash flow generation. The operating cash flow to net income ratio is strong, indicating effective cash conversion from earnings. Although there is a fluctuation in free cash flow growth rates, the overall cash position is stable. The company effectively manages its investing and financing activities, ensuring sufficient liquidity for operations.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	14.72T	14.72T	14.03T	13.95T	12.29T	10.36T
Gross Profit	2.38T	2.38T	2.23T	2.13T	1.94T	1.78T
EBITDA	1.24T	1.36T	1.29T	1.25T	1.28T	968.57B
Net Income	880.25B	880.25B	801.77B	800.52B	820.27B	401.43B
Balance Sheet
Total Assets	15.13T	15.13T	14.49T	13.11T	12.15T	11.18T
Cash, Cash Equivalents and Short-Term Investments	589.49B	589.49B	689.06B	688.80B	724.83B	598.88B
Total Debt	4.62T	4.62T	4.40T	4.01T	3.92T	4.22T
Total Liabilities	8.84T	8.84T	8.50T	7.65T	7.39T	7.31T
Stockholders Equity	5.76T	5.76T	5.43T	4.82T	4.20T	3.32T
Cash Flow
Free Cash Flow	804.64B	804.64B	775.56B	743.98B	644.02B	730.88B
Operating Cash Flow	997.28B	997.28B	978.11B	938.06B	801.16B	895.90B
Investing Cash Flow	-516.27B	-516.27B	-205.99B	-453.81B	38.64B	-207.30B
Financing Cash Flow	-491.80B	-525.00B	-801.17B	-500.08B	-846.71B	-728.77B

Itochu Technical Analysis

Technical Analysis Sentiment

Positive

Last Price8663.00

Price Trends

50DMA

7960.76

Positive

100DMA

7665.65

Positive

200DMA

7355.75

Positive

Market Momentum

MACD

202.08

Negative

RSI

65.40

Neutral

STOCH

88.89

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8001, the sentiment is Positive. The current price of 8663 is above the 20-day moving average (MA) of 8317.05, above the 50-day MA of 7960.76, and above the 200-day MA of 7355.75, indicating a bullish trend. The MACD of 202.08 indicates Negative momentum. The RSI at 65.40 is Neutral, neither overbought nor oversold. The STOCH value of 88.89 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8001.

Itochu Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8001	78 Outperform	¥12.56T	12.98	17.06%	2.31%	2.83%	22.27%
Sector *	63 Neutral	$10.73B	15.32	7.37%	2.01%	2.86%	-14.57%
MARUF	―	$40.27B	11.83	14.30%	2.65%	―	―
MITSF	―	$72.03B	13.51	10.69%	2.69%	―	―
MSBHF	―	$89.92B	17.75	8.85%	2.82%	―	―
SSUMF	―	$35.87B	8.91	13.26%	3.11%	―	―
TYHOF	―	$29.16B	11.97	14.15%	2.87%	―	―

* Industrials Sector Average

Performance Comparison

JP:8001

Itochu

8,663.00

1,422.51

19.65%

MARUF

Marubeni

24.20

9.03

59.53%

MITSF

Mitsui & Co

25.10

5.98

31.28%

MSBHF

Mitsubishi

23.94

4.61

23.85%

SSUMF

Sumitomo

28.58

7.25

33.99%

TYHOF

Toyota Tsusho

26.94

9.38

53.42%

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.Date of analysis: Sep 09, 2025