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Watts Co., Ltd.
(2735)
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Select Model
Rating:67Neutral
Price Target:
¥799.00
▲(25.04% Upside)
Action:Reiterated
Date:08/04/26
The score is held back primarily by weakening profitability and, especially, deteriorating cash flow with negative free cash flow. Offsetting this, the company maintains a conservative balance sheet and the stock looks attractively valued (low P/E with a ~3% dividend). Technically, the trend is positive, but overbought signals temper the near-term outlook.
Positive Factors
Conservative Balance Sheet
Debt-to-equity of 0.26 and a stable equity ratio indicate a conservative capital structure. This gives Watts financial flexibility to sustain store operations and pursue measured investment, while limiting the balance-sheet burden that can amplify pressure when retail profitability weakens.
Negative Factors
Negative Free Cash Flow
Operating and free cash flow have declined, with negative free cash flow in the latest year and negative cash flow relative to net income. Persistent weakness would reduce internally generated funding for store operations and growth, making cash conversion a material durability concern.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative Balance Sheet
Debt-to-equity of 0.26 and a stable equity ratio indicate a conservative capital structure. This gives Watts financial flexibility to sustain store operations and pursue measured investment, while limiting the balance-sheet burden that can amplify pressure when retail profitability weakens.
Read all positive factors
Watts Co., Ltd. (2735) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥9.35B
Dividend Yield2.76%
Average Volume (3M)57.46K
Price to Earnings (P/E)8.8
Beta (1Y)0.17
Revenue Growth3.10%
EPS Growth46.66%
CountryJP
Employees418
SectorConsumer Defensive
Sector Strength42
IndustryDiscount Stores
Share Statistics
EPS (TTM)62.63
Shares Outstanding13,458,800
10 Day Avg. Volume32,530
30 Day Avg. Volume57,463
Financial Highlights & Ratios
PEG Ratio-2.79
Price to Book (P/B)0.67
Price to Sales (P/S)0.14
P/FCF Ratio-3.18
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)72.5
Revenue Forecast (FY)¥64.50B
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 Co., Ltd. makes money primarily by selling merchandise to end customers through its retail stores in Japan. Revenue is mainly generated from (1) product sales of low-priced daily necessities and assorted household goods, where the company ea...
Watts Co., Ltd. Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
70
Positive
Cash Flow
50
Neutral
| Breakdown | TTM | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 62.39B | 61.58B | 61.26B | 59.31B | 58.35B | 50.70B |
| Gross Profit | 24.24B | 23.91B | 23.59B | 22.45B | 22.28B | 19.63B |
| EBITDA | 2.37B | 2.34B | 1.97B | 1.10B | 1.68B | 1.97B |
| Net Income | 829.27M | 870.68M | 904.15M | 250.58M | 781.18M | 965.83M |
Balance Sheet | ||||||
| Total Assets | 26.17B | 27.51B | 30.28B | 25.49B | 25.60B | 21.34B |
| Cash, Cash Equivalents and Short-Term Investments | 4.84B | 6.19B | 9.38B | 5.65B | 6.69B | 6.17B |
| Total Debt | 2.15B | 3.34B | 3.29B | 2.89B | 3.02B | 1.13B |
| Total Liabilities | 12.75B | 14.48B | 17.76B | 13.52B | 13.67B | 10.12B |
| Stockholders Equity | 13.42B | 13.03B | 12.52B | 11.96B | 11.93B | 11.22B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | -2.73B | 3.49B | -326.73M | 1.17B | 58.65M |
| Operating Cash Flow | 0.00 | -1.77B | 4.04B | 221.06M | 1.72B | 378.26M |
| Investing Cash Flow | 0.00 | -1.08B | -538.15M | -667.97M | -975.79M | -778.97M |
| Financing Cash Flow | 0.00 | -351.25M | 233.22M | -633.15M | -328.61M | -51.97M |
Watts Co., Ltd. Technical Analysis
Positive
639.00
Price Trends
692.71
Positive
648.92
Positive
634.38
Positive
Market Momentum
9.56
Positive
57.16
Neutral
66.67
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 720.95, below the 50-day MA of 692.71, and above the 200-day MA of 634.38, indicating a bullish trend. The MACD of 9.56 indicates Positive momentum. The RSI at 57.16 is Neutral, neither overbought nor oversold. The STOCH value of 66.67 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 | ¥104.70B | 10.63 | ― | 2.58% | 0.95% | 3.40% | |
70 Outperform | ¥78.43B | 8.64 | ― | 1.97% | 6.48% | 0.54% | |
67 Neutral | ¥9.35B | 8.84 | ― | 2.76% | 3.10% | 46.66% | |
67 Neutral | ¥223.91B | 17.46 | ― | 2.63% | 3.25% | 1.50% | |
67 Neutral | ¥12.52B | 8.91 | ― | 2.35% | 0.54% | ― | |
65 Neutral | ¥136.47B | 11.13 | ― | 1.96% | 7.40% | -1.99% | |
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.