Itochu (8001) AI Stock Analysis

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Itochu

(OTC:8001)

Rating:77Outperform

Price Target:

¥8,483.00

▲(13.02%Upside)

Itochu's overall stock score is driven primarily by its strong financial performance, reflecting robust revenue and profit growth, effective cost management, and solid balance sheet fundamentals. Technical analysis supports the positive outlook with bullish price trends and healthy momentum indicators. The valuation is reasonable, providing moderate income potential. The absence of recent earnings call insights or corporate events did not impact the score.

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

Market Cap

$10.50T

Dividend Yield2.74%

Average Volume (3M)2.81M

Price to Earnings (P/E)11.9

Beta (1Y)1.10

Revenue Growth4.95%

EPS Growth11.33%

CountryJP

Employees113,733

SectorIndustrials

Sector Strength84

IndustryConglomerates

Share Statistics

EPS (TTM)615.64

Shares Outstanding1,584,889,500

10 Day Avg. Volume3,398,910

30 Day Avg. Volume2,813,020

Financial Highlights & Ratios

PEG Ratio-6.44

Price to Book (P/B)1.31

Price to Sales (P/S)0.00

P/FCF Ratio8.47

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$8,883.26

Price Target Upside18.35% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

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 extensive network of businesses that span across multiple sectors. The company earns money by facilitating international trade, which includes the import and export of goods such as textiles, machinery, and metals. Additionally, Itochu invests in energy and chemical projects, contributing to its earnings through the development, production, and sale of energy resources. The corporation also engages in food production and distribution, further diversifying its income sources. Through its ICT sector, Itochu participates in telecommunications and technology services, adding another revenue stream. Real estate investment and finance activities also play a significant role in Itochu's financial performance. The company's diverse portfolio allows it to leverage cross-sector synergies and maintain stable earnings through strategic partnerships and investments worldwide.

Itochu Earnings Call Summary

Earnings Call Date:May 02, 2025

(Q2-2025)

% Change Since: 3.30%|

Next Earnings Date:Aug 01, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of positive and negative elements. On the positive side, the company reported a significant increase in consolidated net profit, record high core operating cash flows, strong sector performances, and enhanced shareholder returns. However, these achievements were partly offset by declines in specific sectors such as Metals & Minerals, Energy & Chemicals, and General Products & Realty, as well as flat results in the ICT and Financial business. The overall sentiment appears balanced with highlights slightly outweighing the lowlights.

Q2-2025 Updates

Positive Updates

Increase in Consolidated Net Profit

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

Record High Core Operating Cash Flows

Core operating cash flows exceeded JPY 500 billion for the first time in all the half-year results, reaching JPY 513 billion.

Strong Group Performance

87.5% of group companies reported profits, the highest for the first half.

Sector Performance Highlights

Textile, Chemicals, Food, Construction and Real Estate, ICT, and The 8th showed strong performance, resulting in a JPY 12.5 billion increase in core profit, which is 3% growth year-on-year.

Shareholder Returns

Total payout ratio of 50% with a dividend per share of JPY 200, an increase of JPY 40 from the previous fiscal year, and share buybacks of JPY 150 billion.

Negative Updates

Decline in Metals & Minerals Profit

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

Energy & Chemicals Profit Decrease

Profit decreased significantly due to the absence of large extraordinary gain in the previous fiscal year's power and environmental solutions.

General Products & Realty Profit Decline

Profit was down due to the decrease in the North American Construction Materials business affected by higher cost and market downturn.

Flat ICT and Financial Business Results

Results were almost flat year-on-year due to the absence of extraordinary gains recorded in the previous fiscal year and lower profit in the mobile phone business.

Company Guidance

During the earnings call for Q2 2025, Keita Ishii, President of ITOCHU Corporation, reported an increase in consolidated net profit by 6% year-on-year, reaching JPY 438.4 billion, which is 50% of the annual forecast. Core profit was JPY 396 billion, driven by strong performances in sectors like Textile, Chemicals, and Food, reflecting a 3% growth year-on-year. The company achieved an all-time high in core operating cash flows, surpassing JPY 500 billion, reaching JPY 513 billion. The ratio of group companies reporting profits was a record 87.5%. Shareholder returns were a key focus, with a target payout ratio of 50% and a dividend per share increase to JPY 200. The financial position was strengthened with shareholders' equity at JPY 5.6 trillion and a net debt-to-equity ratio of 0.47x. Despite challenges in sectors such as Metals & Minerals and Energy, the first half results showed resilience, with plans for continued growth investments and shareholder returns.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	14.72T	14.03T	13.95T	12.29T	10.36T
Gross Profit	2.38T	2.23T	2.13T	1.94T	1.78T
EBITDA	1.36T	1.29T	1.25T	1.28T	968.57B
Net Income	880.25B	801.77B	800.52B	820.27B	401.43B
Balance Sheet
Total Assets	15.13T	14.49T	13.11T	12.15T	11.18T
Cash, Cash Equivalents and Short-Term Investments	589.49B	689.06B	688.80B	724.83B	598.88B
Total Debt	4.62T	4.40T	4.01T	3.92T	4.22T
Total Liabilities	8.84T	8.50T	7.65T	7.39T	7.31T
Stockholders Equity	5.76T	5.43T	4.82T	4.20T	3.32T
Cash Flow
Free Cash Flow	804.64B	775.56B	743.98B	644.02B	730.88B
Operating Cash Flow	997.28B	978.11B	938.06B	801.16B	895.90B
Investing Cash Flow	-516.27B	-205.99B	-453.81B	38.64B	-207.30B
Financing Cash Flow	-525.00B	-413.33B	-500.08B	-846.71B	-728.77B

Itochu Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7506.00

Price Trends

50DMA

7370.54

Positive

100DMA

7026.10

Positive

200DMA

7252.21

Positive

Market Momentum

MACD

15.73

Positive

RSI

53.13

Neutral

STOCH

49.12

Neutral

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 7506 is above the 20-day moving average (MA) of 7476.75, above the 50-day MA of 7370.54, and above the 200-day MA of 7252.21, indicating a bullish trend. The MACD of 15.73 indicates Positive momentum. The RSI at 53.13 is Neutral, neither overbought nor oversold. The STOCH value of 49.12 is Neutral, 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 (67)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8001	77 Outperform	$10.50T	11.86	15.55%	2.74%	4.95%	11.33%
Sector *	67 Neutral	€3.77B	21.99	10.70%	3.77%	1.50%	-22.32%
MARUF		$32.89B	10.07	13.98%	3.33%	―	―
MITSF		$56.69B	9.79	11.74%	3.39%	―	―
MSBHF		$74.59B	12.24	10.17%	3.41%	―	―
SSUMF		$29.97B	8.23	12.19%	3.46%	―	―
TYHOF		$22.86B	9.27	14.04%	0.02%	―	―

* Industrials Sector Average

Performance Comparison

JP:8001

Itochu

7,506.00

-151.29

-1.98%

MARUF

Marubeni

19.75

2.16

12.28%

MITSF

Mitsui & Co

20.00

-2.27

-10.19%

MSBHF

Mitsubishi

19.97

0.46

2.36%

SSUMF

Sumitomo

25.10

1.03

4.28%

TYHOF

Toyota Tsusho

20.88

1.89

9.95%

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: May 27, 2025