Itochu Corporation (JP:8001)
:8001
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Itochu
(8001)
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Rating:68Neutral
Price Target:
¥2,166.00
▲(9.95% Upside)
Action:DowngradedDate:05/02/26
The score is driven primarily by strong financial performance, especially robust free-cash-flow generation and stable profitability, partially offset by balance-sheet debt. Technical indicators are a meaningful drag due to weak momentum and the stock trading below key moving averages. Valuation is supportive but not compelling enough to outweigh the current technical softness.
Positive Factors
Strong free cash flow generation
Itochu's very strong free cash flow, with FCF around ¥0.87T and conversion near 77% of net income, provides durable internal funding for dividends, buybacks, and reinvestment. This cash strength supports capital allocation flexibility and cushions cyclical dips over the next several quarters.
Negative Factors
Sizeable absolute debt load
Although leverage has improved, the absolute debt stock near ¥4.76T and a debt/equity ~0.91 leave limited headroom if earnings or cash flow weaken. High nominal debt increases interest exposure and can constrain large acquisitions or aggressive buybacks without further deleveraging over the medium term.
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Positive Factors
Negative Factors
Strong free cash flow generation
Itochu's very strong free cash flow, with FCF around ¥0.87T and conversion near 77% of net income, provides durable internal funding for dividends, buybacks, and reinvestment. This cash strength supports capital allocation flexibility and cushions cyclical dips over the next several quarters.
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Itochu (8001) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥15.63T
Dividend Yield2.11%
Average Volume (3M)2.76M
Price to Earnings (P/E)17.7
Beta (1Y)1.09
Revenue Growth0.67%
EPS Growth3.97%
CountryJP
Employees113,733
SectorIndustrials
Sector Strength72
IndustryConglomerates
Share Statistics
EPS (TTM)127.99
Shares Outstanding7,924,447,800
10 Day Avg. Volume2,637,070
30 Day Avg. Volume2,758,586
Financial Highlights & Ratios
PEG Ratio3.90
Price to Book (P/B)2.11
Price to Sales (P/S)0.94
P/FCF Ratio15.93
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥2,463.33Price Target Upside25.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)136.77
Revenue Forecast (FY)¥15.73T
Itochu Business Overview & Revenue Model
Company Description
ITOCHU 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 bran...
How the Company Makes Money
ITOCHU makes money primarily through a combination of (1) trading/transaction margins and related fees and (2) earnings from invested/owned businesses (including equity-method affiliates and consolidated subsidiaries), with additional contribution...
Itochu Earnings Call Summary
Earnings Call Date:Nov 06, 2024
(Q2-2025)
| % Change Since: |
Next Earnings Date:Jul 31, 2026
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.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.
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.
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Q2-2025 Updates
Positive
Negative
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.
Read all positive updates
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
Income Statement
78
Positive
Balance Sheet
72
Positive
Cash Flow
83
Very Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 14.82T | 14.72T | 14.03T | 13.95T | 12.29T |
| Gross Profit | 2.48T | 2.38T | 2.23T | 2.13T | 1.94T |
| EBITDA | 1.16T | 867.48B | 871.47B | 863.52B | 736.21B |
| Net Income | 900.28B | 880.25B | 801.77B | 800.52B | 820.27B |
Balance Sheet | |||||
| Total Assets | 16.73T | 15.13T | 14.49T | 13.11T | 12.15T |
| Cash, Cash Equivalents and Short-Term Investments | 648.44B | 594.68B | 622.48B | 619.27B | 630.39B |
| Total Debt | 4.76T | 5.46T | 5.21T | 4.78T | 4.69T |
| Total Liabilities | 9.54T | 8.84T | 8.50T | 7.65T | 7.39T |
| Stockholders Equity | 6.59T | 5.76T | 5.43T | 4.82T | 4.20T |
Cash Flow | |||||
| Free Cash Flow | 871.75B | 804.64B | 775.56B | 743.98B | 644.02B |
| Operating Cash Flow | 1.13T | 997.28B | 978.11B | 938.06B | 801.16B |
| Investing Cash Flow | -388.87B | -562.02B | -593.84B | -399.04B | 24.54B |
| Financing Cash Flow | -726.48B | -479.24B | -413.33B | -554.85B | -832.61B |
Itochu Technical Analysis
Negative
1970.00
Price Trends
2072.74
Negative
1996.83
Negative
1814.61
Positive
Market Momentum
-16.21
Positive
42.95
Neutral
10.20
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8001, the sentiment is Negative. The current price of 1970 is below the 20-day moving average (MA) of 2021.61, below the 50-day MA of 2072.74, and above the 200-day MA of 1814.61, indicating a neutral trend. The MACD of -16.21 indicates Positive momentum. The RSI at 42.95 is Neutral, neither overbought nor oversold. The STOCH value of 10.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:8001.
Itochu Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | ¥8.57T | 9.00 | 12.86% | 2.48% | 0.62% | 7.66% | |
69 Neutral | ¥9.08T | 20.63 | 13.39% | 2.29% | 6.11% | 9.13% | |
69 Neutral | ¥18.22T | 25.47 | 7.39% | 2.94% | 1.60% | -10.27% | |
68 Neutral | ¥15.63T | 17.70 | 15.23% | 2.11% | 0.67% | 3.97% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | ¥1.08T | 13.95 | 11.17% | 3.24% | 9.87% | -3.76% | |
54 Neutral | ¥15.64T | 19.09 | 11.47% | 2.28% | -4.55% | -5.17% |
* Industrials Sector Average
JP:8001
Itochu
2,010.00
545.57
37.26%
JP:8002
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5,418.00
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Sumitomo
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3,601.04
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64.31%
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.