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Toray Industries Inc (TRYIY)
OTHER OTC:TRYIY
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Toray Industries
(OTC:TRYIY)
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Rating:57Neutral
Price Target:
$17.00
▲(30.37% Upside)
Action:ReiteratedDate:02/18/26
The score is held back primarily by weakening cash flow and thin profitability/low returns despite a manageable balance sheet. Technicals are supportive with a strong uptrend, but overbought signals add near-term risk, and the high P/E with only a modest yield reduces valuation appeal.
Positive Factors
Diversified business model
Toray's revenue mix across fibers, plastics, carbon fiber composites and life sciences provides durable diversification. Multiple end markets reduce reliance on a single cyclical industry, enabling more stable revenue streams and cross-segment R&D synergies that support long-term competitiveness and resilience.
Structural carbon-fiber demand
Sustained demand for lightweight materials in aerospace and automotive is a structural tailwind for Toray's carbon-fiber business. Exposure to higher-value advanced materials positions the company to capture durable secular growth, higher margin product mix, and long lead commercial cycles tied to vehicle and aircraft programs.
Manageable leverage
Debt around 0.52x equity with a sizable equity base provides financial flexibility to fund capex, R&D and strategic investments without excessive refinancing stress. This balance-sheet headroom supports multi-year initiatives and helps absorb cyclicality, reducing bankruptcy risk over a 2-6 month horizon and beyond.
Negative Factors
Weak cash generation
A steep ~61% decline in FCF, and FCF that is only ~21% of net income, signal persistent cash conversion weakness. Over time this limits organic reinvestment, dividend sustainability and deleveraging ability, forcing reliance on cost cuts, asset sales or external financing to fund growth initiatives.
Thin profitability and low returns
Low net margin and ROE indicate the business currently generates little incremental shareholder value. Thin profitability constrains internal funding for R&D and capex, magnifies the impact of input-cost inflation, and makes meaningful improvement dependent on structural product mix shifts or sustained pricing power—neither guaranteed.
Modest revenue growth and earnings volatility
Modest top-line growth and TTM earnings below the last annual result reflect uneven demand conversion and margin pressure. For long-term improvement Toray needs sustained revenue expansion or structural margin lift; absent that, cash flow and returns may remain constrained and unpredictable.
Toray Industries (TRYIY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.46B
Dividend Yield1.48%
Average Volume (3M)818.00
Price to Earnings (P/E)44.4
Beta (1Y)0.26
Revenue Growth-1.45%
EPS Growth30.18%
CountryUS
Employees48,140
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Manufacturers
Share Statistics
EPS (TTM)0.03
Shares Outstanding752,240,700
10 Day Avg. Volume0
30 Day Avg. Volume818
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)0.95
Price to Sales (P/S)0.63
P/FCF Ratio21.39
Enterprise Value/Market Cap213.29
Enterprise Value/Revenue1.03
Enterprise Value/Gross Profit5.18
Enterprise Value/Ebitda10.29
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Toray Industries Business Overview & Revenue Model
Company DescriptionToray Industries, Inc. is a leading global manufacturer specializing in advanced materials and technology solutions. Founded in Japan, the company operates across several sectors, including textiles, carbon fiber composites, plastics, and chemicals. Toray is known for its innovative products, including high-performance fibers, films, and resins that serve a wide range of industries such as aerospace, automotive, electronics, and healthcare.
How the Company Makes MoneyToray Industries generates revenue through a diversified business model that includes multiple key segments such as fibers and textiles, plastics and chemicals, carbon fiber composites, and life sciences. Each of these segments contributes to the company's earnings through the sale of high-value products and specialized materials. The fibers and textiles segment, for instance, provides a steady income through the production of synthetic fibers and fabrics used in clothing and industrial applications. The plastics and chemicals division profits from the manufacture of various polymer products and chemicals used in diverse industries. Additionally, the carbon fiber composites sector has seen significant growth due to increasing demand in aerospace and automotive applications, where lightweight, durable materials are essential. Toray also engages in strategic partnerships and collaborations with various companies, enhancing its market reach and technological capabilities, which further contribute to its revenue. Furthermore, the company invests in research and development to create innovative solutions that meet evolving industry needs, ensuring a competitive edge and sustained earnings growth.
Toray Industries Earnings Call Summary
Earnings Call Date:Nov 07, 2024
(Q2-2025)
| % Change Since: |
Next Earnings Date:May 08, 2026
Earnings Call Sentiment Positive
The earnings call presents a strong financial performance with record high income and significant profit increases, alongside strategic initiatives in pricing and capital efficiency. However, challenges remain in asset values and specific segments like Life Science, with potential economic risks noted.Q2-2025 Updates
Positive Updates
Record High Core Operating Income
Core operating income for the first 6 months reached JPY 79.1 billion, marking a 62.6% increase compared to the previous year and a record high for the period.
Significant Profit Increase
Profit increased by 92.3% to JPY 55.5 billion compared to the same period last year.
Revenue Growth Across Segments
Consolidated revenue for the 6 months increased by 7.9% to JPY 1,294.1 billion, with notable growth in the Performance Chemicals (10.3% increase) and Carbon Fiber Composite Materials (8.3% increase) segments.
Strategic Pricing and Structural Reform
Strategic pricing exceeded plans, contributing to a 2.1-point increase in core operating income margin. Structural reforms and profitability improvement projects like D Pro have also contributed positively.
Share Buyback and Capital Efficiency
Resolution to repurchase shares of common stock and a policy to improve capital efficiency by reducing cross-shareholdings by half over 3 years.
Positive Free Cash Flow
Free cash flow was positive at JPY 65.4 billion.
Negative Updates
Decrease in Assets and Liabilities
Total assets decreased by JPY 100.7 billion and total liabilities decreased by JPY 92.6 billion from the end of the previous fiscal year, affected by currency appreciation.
Life Science Segment Challenges
Core operating income in the Life Science segment decreased by JPY 0.1 billion to negative JPY 0.6 billion, impacted by the penetration of generic drugs and NHI drug price revisions.
Potential Downward Economic Risks
Potential risks include changes in U.S. fiscal and trade policies, prolonged real estate recession in China, and impacts of financial policies in the U.S. and Europe.
Company Guidance
In the earnings call for Q2 2025, Toray Group reported a significant financial upturn, with consolidated revenue for the first half of the fiscal year increasing by 7.9% to JPY 1,294.1 billion. Core operating income soared by 62.6% to JPY 79.1 billion, marking a record high, while profit surged by 92.3% to JPY 55.5 billion. The company highlighted its strategic initiatives, including a share buyback plan funded by the reduction of cross-shareholdings, aimed at enhancing capital efficiency. Segment-wise, Performance Chemicals led growth with a 134.2% rise in core operating income, supported by demand recovery and improved utilization rates, while the Carbon Fiber Composite Materials segment also saw a 54.4% increase in core operating income. The company revised its full-year forecast upwards, anticipating revenue of JPY 2,590 billion and a core operating income of JPY 145 billion, reflecting a robust performance outlook amidst a gradually recovering global economy.Toray Industries Financial Statement Overview
Summary
Modest revenue growth (TTM +2.7%) and manageable leverage support stability, but profitability is thin (net margin ~2.4%) and ROE is low (~3.4%). The main drag is cash flow: free cash flow fell sharply (~-61%) and is low relative to net income (~21%), reducing financial flexibility.Income Statement
TTM (Trailing-Twelve-Months) revenue grew 2.7%, indicating modest top-line momentum. Profitability is steady but not strong for the period: gross margin is ~19.9% and operating profitability is moderate (EBIT margin ~4.6%, EBITDA margin ~9.7%), while net margin is thin (~2.4%). Net income in TTM is notably below the most recent annual result, pointing to weaker bottom-line conversion and some earnings volatility.58
Neutral
Balance Sheet
Leverage looks manageable with debt at ~0.52x equity in TTM (improved versus higher leverage in earlier years), supported by a sizeable equity base (~¥1.76T) against total assets (~¥3.52T). However, returns are modest: TTM return on equity is ~3.4%, well below stronger prior-year levels, suggesting the balance sheet is not currently generating high profitability.67
Positive
Cash Flow
Cash generation is a key weak spot in TTM: free cash flow is positive (~¥19.2B) but sharply down (about -61% growth), and free cash flow is low relative to net income (~21%). Operating cash flow coverage is also modest (~0.28), indicating limited cash cushion versus funding needs, and cash flow strength appears less consistent than in prior annual periods.46
Neutral
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.58T | 2.56T | 2.46T | 2.49T | 2.23T | 1.88T |
| Gross Profit | 513.24B | 505.89B | 443.52B | 420.83B | 377.50B | 438.36B |
| EBITDA | 258.05B | 265.29B | 207.84B | 219.00B | 252.43B | 206.08B |
| Net Income | 43.30B | 77.91B | 21.90B | 72.82B | 84.23B | 45.79B |
Balance Sheet | ||||||
| Total Assets | 3.52T | 3.29T | 3.47T | 3.19T | 2.85T | 2.65T |
| Cash, Cash Equivalents and Short-Term Investments | 245.72B | 254.52B | 248.86B | 254.69B | 242.49B | 242.49B |
| Total Debt | 1.02T | 842.66B | 949.68B | 950.09B | 935.66B | 973.93B |
| Total Liabilities | 1.63T | 1.47T | 1.62T | 1.56T | 1.53T | 1.47T |
| Stockholders Equity | 1.76T | 1.71T | 1.74T | 1.54T | 1.41T | 1.24T |
Cash Flow | ||||||
| Free Cash Flow | 19.16B | 75.78B | 51.55B | 43.00B | 89.11B | 85.62B |
| Operating Cash Flow | 182.68B | 255.03B | 185.68B | 145.21B | 211.59B | 225.77B |
| Investing Cash Flow | -15.05B | -63.20B | -121.00B | -102.72B | -97.87B | -142.36B |
| Financing Cash Flow | -105.88B | -188.52B | -70.37B | -57.38B | -69.40B | -67.59B |
Toray Industries Technical Analysis
Positive
13.04
Price Trends
14.36
Positive
13.49
Positive
13.47
Positive
Market Momentum
0.70
Negative
67.98
Neutral
84.63
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRYIY, the sentiment is Positive. The current price of 13.04 is below the 20-day moving average (MA) of 15.65, below the 50-day MA of 14.36, and below the 200-day MA of 13.47, indicating a bullish trend. The MACD of 0.70 indicates Negative momentum. The RSI at 67.98 is Neutral, neither overbought nor oversold. The STOCH value of 84.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TRYIY.
Toray Industries Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $1.34B | 9.56 | 8.61% | ― | -2.61% | -11.87% | |
68 Neutral | $3.46B | 19.84 | 10.16% | 2.18% | 2.76% | -7.83% | |
68 Neutral | $4.61B | 27.54 | 10.58% | 1.33% | -1.88% | -5.94% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
57 Neutral | $12.46B | 44.39 | 3.37% | 1.48% | -1.45% | 30.18% | |
56 Neutral | $1.68B | -30.64 | -6.19% | 2.13% | -9.37% | -160.13% | |
51 Neutral | $75.62M | -3.25 | -9.61% | ― | -5.26% | 42.84% |
* Consumer Cyclical Sector Average
TRYIY
Toray Industries
16.52
3.22
24.25%
AIN
Albany International
59.44
-18.85
-24.08%
COLM
Columbia Sportswear
64.23
-26.05
-28.85%
GIII
G-III Apparel Group
31.89
3.96
14.18%
UFI
Unifi
4.15
-1.27
-23.43%
ZGN
Ermenegildo Zegna
11.45
3.00
35.50%
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.