NIPPON GAS Co (8174) AI Stock Analysis

• Market Cap: ¥341.36B
• Dividend Yield: 3.28%
• Average Volume (3M): 291.71K
• Price to Earnings (P/E): 25.7
• Beta (1Y): 0.36
• Revenue Growth: 4.45%
• EPS Growth: 53.88%
• Country: JP
• Employees: 1,716
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 38.53
• Shares Outstanding: 112,827,194
• 10 Day Avg. Volume: 227,610
• 30 Day Avg. Volume: 291,713
• PEG Ratio: 2.31
• Price to Book (P/B): 3.66
• Price to Sales (P/S): 1.23
• P/FCF Ratio: 11.14
• 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): 139.62
• Revenue Forecast (FY): ¥200.70B

• Rating: 64 Neutral
• Price Target: ¥2,990.00 ▼(-0.60% Downside)
• Action: Downgraded Date: 02/05/26
• Date: Action: Downgraded 02/05/26

The score is primarily supported by improving recent profitability and solid free cash flow generation, alongside strong ROE. Offsetting this are margin compression versus earlier years and a clear upward drift in leverage, while technical indicators point to weak near-term momentum. Valuation is mixed, with a decent dividend yield but a relatively high P/E.

Positive Factors

Recurring, customer-facing business model

Nippon Gas operates a durable, recurring-revenue model: ongoing LP gas deliveries plus installation, inspection and maintenance. This creates sticky customer relationships and multiple service touchpoints that support steady cash inflows and cross-sell opportunities over a multi-month to multi-year horizon.

Strong recent revenue growth and margin improvement

A near-doubling of TTM revenue alongside improved operating and net margins signals meaningful underlying demand or pricing recovery and operational leverage. Sustained top-line expansion plus margin progress can strengthen cash generation and provide room to invest in infrastructure or customer services over coming quarters.

Healthy cash generation

Consistent positive OCF and sizeable FCF indicate the business converts earnings into cash, supporting dividends, maintenance capex and working-capital needs. Even with some year-to-year swings, meaningful FCF coverage of earnings boosts financial flexibility for reinvestment or deleveraging over the medium term.

Negative Factors

Rising leverage

Debt-to-equity climbing toward ~0.81 reflects increasing balance-sheet gearing for a regulated-energy profile. Higher leverage reduces financial flexibility, raises interest service risk, and limits capacity to absorb demand shocks or fund growth without raising additional capital if margins or volumes weaken.

Structural margin compression vs earlier years

A material decline in gross margin versus historical peaks suggests persistent cost pressures, competitive price dynamics, or mix shifts that have compressed profitability. If structural, such margin erosion can limit internally generated funds and constrain reinvestment and returns over multiple quarters.

Imperfect cash conversion and recent FCF decline

Although FCF is positive, a recent decline and OCF at ~55% of net income indicate working-capital or timing volatility. Uneven cash conversion increases forecast risk for capex, dividends and debt repayment, making capital allocation less predictable across a 2–6 month horizon.

NIPPON GAS Co Business Overview & Revenue Model

Company Description

NIPPON GAS Co (8174) is a prominent Japanese company primarily involved in the gas utility sector, focusing on the distribution and retail of natural gas to residential, commercial, and industrial customers. The company also engages in energy-related services, including electricity generation and sales, as well as providing energy efficiency solutions. NIPPON GAS is committed to sustainability and innovation in energy services, aiming to enhance the quality of life for its customers while contributing to a low-carbon society.

How the Company Makes Money

NIPPON GAS generates revenue primarily through the sale of natural gas to its diverse customer base, which includes households, businesses, and industrial clients. The company's revenue model is multifaceted, encompassing not only the direct sales of gas but also the provision of supplementary energy services, such as electricity supply and energy management solutions. Key revenue streams include fixed and variable charges associated with gas supply contracts, service fees for energy efficiency consultations, and income from electricity sales. Additionally, the company may benefit from partnerships with other energy firms and participation in government programs aimed at promoting renewable energy sources, further diversifying its revenue portfolio.

NIPPON GAS Co Financial Statement Overview

Summary

Income statement is the main positive with sharp TTM revenue growth (+93.7%) and improved operating/net margins versus the most recent annual result, but profitability is still pressured versus earlier years (gross margin down to ~32% TTM from ~47% in FY2021). Balance sheet quality is mixed: ROE is strong (~20.4% TTM) but leverage is trending higher (debt-to-equity ~0.81). Cash flow is supportive with positive free cash flow (~¥19.7B) and decent FCF-to-net-income (~76%), though FCF slipped (-6.3%) and cash conversion is uneven (OCF ~55% of net income).

Income Statement

TTM (Trailing-Twelve-Months) revenue rose sharply (+93.7% vs the prior period provided), while profitability improved versus recent annual results (TTM operating margin ~10.7% and net margin ~6.5% vs FY2025 net margin ~5.8%). However, margins are below the stronger levels seen earlier in the period (gross margin down from ~47% in FY2021 to ~32% in TTM), suggesting cost/price pressures and a more volatile earnings profile despite the recent step-up.

Balance Sheet

Leverage is moderate for a regulated utility profile, with TTM debt-to-equity at ~0.81 (up from ~0.70 in FY2025 and ~0.55–0.65 in FY2022–FY2024), indicating rising balance-sheet gearing. Returns on equity are solid and improving (TTM ~20.4% vs ~17.1% in FY2025), but the upward debt trend reduces financial flexibility if profitability or volumes soften.

Cash Flow

Cash generation is healthy: TTM operating cash flow (~¥26.1B) supports positive free cash flow (~¥19.7B), and free cash flow covers a meaningful portion of earnings (TTM free cash flow is ~76% of net income). That said, TTM free cash flow declined (-6.3%), and cash conversion remains imperfect (operating cash flow is ~55% of net income in TTM), pointing to working-capital or timing swings that can create year-to-year variability.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	204.10B	200.06B	194.36B	207.89B	162.55B	143.49B
Gross Profit	64.89B	63.29B	73.62B	69.82B	66.59B	67.79B
EBITDA	40.27B	28.35B	26.49B	26.71B	26.47B	24.74B
Net Income	13.27B	11.55B	10.82B	10.57B	9.97B	9.37B
Balance Sheet
Total Assets	153.65B	156.02B	159.22B	153.43B	153.81B	140.12B
Cash, Cash Equivalents and Short-Term Investments	17.06B	19.81B	18.99B	13.05B	17.02B	12.45B
Total Debt	50.67B	46.94B	47.19B	40.58B	45.94B	41.51B
Total Liabilities	90.78B	88.57B	86.50B	79.90B	81.92B	70.78B
Stockholders Equity	62.39B	67.45B	72.72B	74.30B	71.89B	69.34B
Cash Flow
Free Cash Flow	19.69B	22.15B	13.79B	11.92B	10.94B	602.00M
Operating Cash Flow	26.08B	27.92B	23.44B	19.59B	20.69B	16.07B
Investing Cash Flow	-7.42B	-8.81B	-9.19B	-7.58B	-8.79B	-14.51B
Financing Cash Flow	-15.81B	-18.39B	-8.71B	-16.07B	-7.41B	-5.71B

NIPPON GAS Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3008.00
• 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:8174, the sentiment is Positive. The current price of 3008 is above the 20-day moving average (MA) of 2992.25, above the 50-day MA of 2972.58, and above the 200-day MA of 2810.22, indicating a bullish trend. The MACD of 36.34 indicates Negative momentum. The RSI at 65.61 is Neutral, neither overbought nor oversold. The STOCH value of 75.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8174.

NIPPON GAS Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9536	76 Outperform	¥96.23B	9.60	9.07%	3.61%	9.39%	77.24%
9543	75 Outperform	¥112.86B	11.41	8.29%	3.89%	1.08%	37.11%
9533	73 Outperform	¥552.76B	19.60	6.03%	1.81%	7.08%	43.50%
9531	72 Outperform	¥2.83T	13.37	11.05%	1.53%	5.72%	148.08%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
8174	64 Neutral	¥341.36B	25.71	21.07%	3.28%	4.45%	53.88%
9532	63 Neutral	¥2.59T	13.96	10.44%	1.98%	1.99%	95.71%

NIPPON GAS Co Corporate Events

Nippon Gas Maintains Full-Year Profit Outlook After Record-High Q3 Operating Income

Nippon Gas reported that operating income for the third quarter of the fiscal year ending March 2026 exceeded its internal plan, supported by higher gross profit driven mainly by its electricity business, while LP gas and city gas performed in line with expectations and selling, general and administrative expenses were kept under control. The company maintained its full-year operating income forecast of ¥20.0 billion and gross profit target of ¥75.0 billion, adopting a conservative outlook for fourth-quarter demand and margins amid potential temperature and pricing slide impacts, and highlighted record-high third-quarter operating income, steady net income guidance of ¥14.0 billion, and a previously announced share buyback program of up to ¥9.0 billion as part of its shareholder return policy.

The most recent analyst rating on (JP:8174) stock is a Buy with a Yen3324.00 price target. To see the full list of analyst forecasts on NIPPON GAS Co stock, see the JP:8174 Stock Forecast page.

Nippon Gas Delivers Strong Profit Growth and Higher Dividends for Nine Months to December 2025

Nippon Gas reported solid earnings growth for the nine months ended 31 December 2025, with net sales rising 2.9% year-on-year to ¥141.96 billion and operating income surging 30.3% to ¥11.01 billion, driving a 29.2% increase in profit attributable to owners of parent to ¥7.63 billion. Despite a slight decline in total assets and equity ratio versus March 2025, the company lifted interim dividends to ¥51.50 per share and is maintaining its full-year forecast, targeting operating income and ordinary income of ¥20.0 billion and profit attributable to owners of parent of ¥14.0 billion, which would mark double-digit profit growth and support an annual dividend of ¥103.00 per share, underscoring confidence in its earnings trajectory and shareholder returns as it integrates the newly consolidated Tokyo Energy Alliance Co., Ltd.

The most recent analyst rating on (JP:8174) stock is a Buy with a Yen3324.00 price target. To see the full list of analyst forecasts on NIPPON GAS Co stock, see the JP:8174 Stock Forecast page.

Nippon Gas Reports Ongoing Progress in Share Buyback Program

Nippon Gas Co., Ltd. has reported progress on its ongoing share repurchase program, buying back 726,900 common shares for approximately ¥2.14 billion through market purchases on the Tokyo Stock Exchange between January 1 and January 31, 2026. This forms part of a broader board-approved buyback plan, under which the company is authorized to repurchase up to 4 million shares or ¥9 billion by March 31, 2026; as of the end of January, Nippon Gas had cumulatively repurchased 1,396,900 shares for about ¥4.12 billion, representing roughly 35% of the maximum share count and 46% of the maximum monetary amount, a move likely aimed at enhancing shareholder value and optimizing capital structure.

The most recent analyst rating on (JP:8174) stock is a Buy with a Yen3324.00 price target. To see the full list of analyst forecasts on NIPPON GAS Co stock, see the JP:8174 Stock Forecast page.

Nippon Gas Reports Progress on Ongoing Share Buyback Program

Nippon Gas has reported progress on its ongoing share repurchase program, buying back 259,400 common shares on the Tokyo Stock Exchange between December 1 and December 31, 2025, for a total of ¥773.8 million. Under the broader buyback authorization approved by the board in October 2025—covering up to 4 million shares or ¥9 billion through March 31, 2026—the company has cumulatively repurchased 670,000 shares for about ¥1.98 billion as of December 31, 2025, representing 16.8% of the maximum share volume and 22.0% of the planned monetary amount, signaling a continued commitment to shareholder returns and balance sheet optimization.

The most recent analyst rating on (JP:8174) stock is a Buy with a Yen3396.00 price target. To see the full list of analyst forecasts on NIPPON GAS Co stock, see the JP:8174 Stock Forecast page.

Nippon Gas Reshapes Executive Team, Elevates Corporate Headquarters and Finance Functions

Nippon Gas Co., Ltd. has announced a series of executive officer changes effective December 23, 2025, aimed at strengthening its corporate headquarters and financial management structure. Managing Executive Officer Keiichi Ozaku has been appointed Head of Corporate Headquarters, while Executive Officer Madoka Yamagishi assumes expanded responsibilities as Deputy Head of Corporate Headquarters, Head of Corporate Planning/IR Department, and General Manager of the Financial Department, consolidating key planning, investor relations, and finance functions under a single role. The updated management lineup also reaffirms the roles of senior executives overseeing sales, regional branches, and core corporate functions including safety, human resources, electricity business, legal, and ICT, signaling an organizational realignment designed to enhance governance, operational oversight, and support for the company’s nationwide energy operations.

The most recent analyst rating on (JP:8174) stock is a Buy with a Yen3396.00 price target. To see the full list of analyst forecasts on NIPPON GAS Co stock, see the JP:8174 Stock Forecast page.

Nippon Gas Co. Reports Progress in Share Repurchase Program

Nippon Gas Co., Ltd. announced the progress of its share repurchase program, with 305,600 common shares repurchased for 908,032,050 yen during November 2025. This move is part of a broader plan approved in October 2025 to repurchase up to 4 million shares, which represents 3.7% of its outstanding shares, by March 2026. The ongoing repurchase is expected to enhance shareholder value and optimize the company’s capital structure.

The most recent analyst rating on (JP:8174) stock is a Buy with a Yen3142.00 price target. To see the full list of analyst forecasts on NIPPON GAS Co stock, see the JP:8174 Stock Forecast page.