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Watts Co., Ltd.
(2735)
Select Model
Select Model
Rating:67Neutral
Price Target:
¥777.00
▲(21.60% Upside)
Action:Reiterated
Date:10/10/26
Overall score is driven primarily by improving profitability and a notably low-debt balance sheet, partially offset by inconsistent cash-flow conversion and thin operating margins. Technicals are neutral-to-mildly constructive (positive longer-term trend but short-term softness), while valuation is favorable with a low P/E and a ~2.8% dividend yield.
Positive Factors
Conservative Balance Sheet
Very low leverage reduces refinancing and interest-burden risk, while the larger equity base provides a stronger cushion against operating setbacks. This financial flexibility can support store investment or absorb volatility without relying heavily on additional borrowing.
Negative Factors
Thin Operating Margins
Thin operating and net margins leave limited room for adverse changes in labor, rent, logistics, procurement, or other store costs. Even with stable gross margins, modest cost pressure could therefore produce a disproportionate effect on earnings and returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative Balance Sheet
Very low leverage reduces refinancing and interest-burden risk, while the larger equity base provides a stronger cushion against operating setbacks. This financial flexibility can support store investment or absorb volatility without relying heavily on additional borrowing.
Read all positive factors
Watts Co., Ltd. (2735) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥9.18B
Dividend Yield2.81%
Average Volume (3M)49.03K
Price to Earnings (P/E)8.3
Beta (1Y)0.17
Revenue Growth4.75%
EPS Growth30.29%
CountryJP
Employees418
SectorConsumer Defensive
Sector Strength42
IndustryDiscount Stores
Share Statistics
EPS (TTM)62.63
Shares Outstanding13,458,800
10 Day Avg. Volume46,880
30 Day Avg. Volume49,026
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)0.67
Price to Sales (P/S)0.14
P/FCF Ratio7.81
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)83.1
Revenue Forecast (FY)¥65.20B
Watts Co., Ltd. Business Overview & Revenue Model
Company Description
Watts Co., Ltd. and its subsidiaries engage in the wholesale and retail of daily essentials and household goods, serving customers both within Japan and internationally. The company also extends its operations to include grocery retail and a broad...
How the Company Makes Money
Watts primarily makes money through retail sales of low-priced general merchandise to consumers in its stores. Its core revenue stream is product sales across a wide assortment of daily necessities and convenience goods, typically emphasizing valu...
Watts Co., Ltd. Financial Statement Overview
Summary
Income Statement
64
Positive
Balance Sheet
78
Positive
Cash Flow
55
Neutral
| Breakdown | TTM | Aug 2026 | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 62.39B | 64.50B | 61.58B | 61.26B | 59.31B | 58.35B |
| Gross Profit | 24.24B | 25.00B | 23.91B | 23.59B | 22.45B | 22.28B |
| EBITDA | 2.37B | 2.58B | 2.34B | 1.97B | 1.10B | 1.68B |
| Net Income | 829.27M | 1.14B | 870.68M | 904.15M | 250.58M | 781.18M |
Balance Sheet | ||||||
| Total Assets | 26.17B | 26.02B | 27.51B | 30.28B | 25.49B | 25.60B |
| Cash, Cash Equivalents and Short-Term Investments | 4.84B | 4.74B | 6.19B | 9.38B | 5.65B | 6.69B |
| Total Debt | 2.15B | 1.14B | 3.34B | 3.29B | 2.89B | 3.02B |
| Total Liabilities | 12.75B | 12.09B | 14.48B | 17.76B | 13.52B | 13.67B |
| Stockholders Equity | 13.42B | 13.92B | 13.03B | 12.52B | 11.96B | 11.93B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 1.19B | -2.73B | 3.49B | -326.73M | 1.17B |
| Operating Cash Flow | 0.00 | 1.81B | -1.77B | 4.04B | 221.06M | 1.72B |
| Investing Cash Flow | 0.00 | -868.84M | -1.08B | -538.15M | -667.97M | -975.79M |
| Financing Cash Flow | 0.00 | -2.46B | -351.25M | 233.22M | -633.15M | -328.61M |
Watts Co., Ltd. Technical Analysis
Positive
639.00
Price Trends
699.17
Positive
655.44
Positive
637.36
Positive
Market Momentum
5.83
Positive
48.59
Neutral
23.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2735, the sentiment is Positive. The current price of 639 is below the 20-day moving average (MA) of 723.30, below the 50-day MA of 699.17, and above the 200-day MA of 637.36, indicating a neutral trend. The MACD of 5.83 indicates Positive momentum. The RSI at 48.59 is Neutral, neither overbought nor oversold. The STOCH value of 23.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2735.
Watts Co., Ltd. Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | ¥101.51B | 10.30 | ― | 2.66% | 0.95% | 3.40% | |
70 Outperform | ¥79.39B | 8.75 | ― | 1.94% | 6.48% | 0.54% | |
67 Neutral | ¥9.18B | 8.28 | ― | 2.81% | 4.75% | 30.29% | |
67 Neutral | ¥213.18B | 16.93 | ― | 2.76% | 2.59% | 0.10% | |
67 Neutral | ¥12.47B | 8.88 | ― | 2.36% | 0.54% | ― | |
65 Neutral | ¥128.12B | 11.50 | ― | 2.08% | 4.94% | -9.98% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% |
* Consumer Defensive Sector Average
JP:2735
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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.