MUROMACHI CHEMICALS INC. (4885) AI Stock Analysis

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MUROMACHI CHEMICALS INC.

(TSE/TYO:4885)

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Rating:61Neutral

Price Target:JPY 942.00▲(8.53% Upside)

Action:reiterated

Date:10/15/26

The score is driven primarily by improving revenue growth, stronger operating performance, and a 2026 cash-flow rebound, offset by weaker net profitability, rising leverage, and a longer-term technical downtrend (price below 100/200-day averages). Valuation is reasonable with a supportive ~2.8% yield but not compelling enough to outweigh the profitability and trend concerns.

Positive Factors

Accelerating Revenue GrowthThe acceleration in revenue growth indicates improving demand and stronger commercial momentum across the company’s chemical products. If sustained, higher sales can support operating leverage, broaden customer adoption, and provide a stronger base for reinvestment over the next several quarters.

Negative Factors

Weakening Net ProfitabilityDeclining net margin shows that stronger operating performance is not fully reaching the bottom line. Persistent pressure from costs, non-operating items, or taxes could limit earnings conversion, weaken retained capital formation, and make future profitability less dependable despite revenue growth.

MUROMACHI CHEMICALS INC. (4885) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 3.18B
Dividend Yield: 2.88%
Average Volume (3M): 9,835
Price to Earnings (P/E): 14.1
Beta (1Y): 0.91
Revenue Growth: 14.73%
EPS Growth: 7.50%
Country: Japan
Employees: 203
Sector: General
Sector Strength: 55
Industry: Medical - Pharmaceuticals

MUROMACHI CHEMICALS INC. Business Overview & Revenue Model

Company Description

Muromachi Chemicals Inc. plans, produces, and distributes pharmaceuticals, health foods, and chemicals in Japan. It offers active pharmaceutical ingredients and intermediate synthesis products; commissioned processing services for pharmaceuticals; an...

How the Company Makes Money

MUROMACHI CHEMICALS INC. generates revenue primarily by selling its chemical products to business customers (B2B). Its earnings are driven by (1) product sales volume and (2) the unit pricing/mix of higher value-added functional materials versus more...

MUROMACHI CHEMICALS INC. Financial Statement Overview

Summary

Financials show improving operations and cash flow, but with notable profitability and leverage offsets. Revenue growth accelerated (~18% in 2026 vs. ~4% in 2025) and operating margin improved (~9.5% vs. ~5.7%), while net margin fell to ~2.1% (from ~3.6% in 2025). Cash flow rebounded strongly in 2026 (FCF ~¥578M) after negative FCF in 2025, indicating volatility. Balance sheet leverage is moderate but rising (debt-to-equity ~0.82 vs. ~0.67), reducing flexibility.

Income Statement

67Positive

Balance Sheet

58Neutral

Cash Flow

62Positive

Financial statement breakdown
Breakdown	May 2025	May 2024	May 2023	May 2022	May 2021
Income Statement
Total Revenue	7.84B	6.65B	6.37B	6.29B	4.94B
Gross Profit	2.30B	1.91B	1.82B	1.72B	1.63B
EBITDA	933.95M	540.83M	623.24M	493.14M	493.49M
Net Income	163.03M	241.28M	330.20M	256.30M	180.71M
Balance Sheet
Total Assets	6.35B	5.32B	5.10B	4.96B	4.62B
Cash, Cash Equivalents and Short-Term Investments	1.95B	1.06B	1.05B	852.61M	1.00B
Total Debt	2.10B	1.65B	1.44B	1.57B	2.04B
Total Liabilities	3.78B	2.87B	2.83B	3.04B	3.29B
Stockholders Equity	2.58B	2.45B	2.27B	1.92B	1.33B
Cash Flow
Free Cash Flow	578.13M	-112.85M	412.21M	257.42M	438.63M
Operating Cash Flow	808.09M	215.96M	637.70M	317.19M	487.67M
Investing Cash Flow	-237.79M	-370.50M	-232.23M	-162.41M	-57.73M
Financing Cash Flow	317.78M	123.20M	-209.95M	-172.39M	-310.51M

MUROMACHI CHEMICALS INC. Technical Analysis

Technical Analysis SentimentNegative

Last Price868.00

Price Trends

50DMA895.26Negative

100DMA901.20Negative

200DMA964.97Negative

Market Momentum

MACD-11.60Positive

RSI41.55Neutral

STOCH35.23Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4885, the sentiment is Negative. The current price of 868.00 is below the 20-day moving average (MA) of 895.30, below the 50-day MA of 895.26, and below the 200-day MA of 964.97, indicating a bearish trend. The MACD of -11.60 indicates Positive momentum. The RSI at 41.55 is Neutral, neither overbought nor oversold. The STOCH value of 35.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4885.

MUROMACHI CHEMICALS INC. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:4885 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4040	79Outperform	JPY 9.55B	2.74	―	1.60%	0.56%	238.99%
JP:6568	73Outperform	JPY 9.10B	11.24	―	2.81%	12.39%	22.04%
JP:4093	69Neutral	JPY 13.88B	11.06	―	3.44%	-0.22%	4.42%
JP:4885	61Neutral	JPY 3.16B	14.08	―	2.88%	14.73%	7.50%
JP:4960	59Neutral	JPY 8.14B	22.14	―	1.01%	6.87%	300.65%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%

* General Sector Average

Performance Comparison

JP:4885 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:4885	MUROMACHI CHEMICALS INC.	868.00	152.41	21.30%
JP:4040	NANKAI CHEMICAL COMPANY LIMITED	4050.00	951.32	30.70%
JP:4093	Toho Acetylene Co., Ltd.	407.00	66.88	19.66%
JP:4960	Chemipro Kasei Kaisya,Ltd.	516.00	184.49	55.65%
JP:6568	KNC Laboratories Co.,Ltd.	1176.00	85.19	7.81%

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: Oct 15, 2026

MUROMACHI CHEMICALS INC. AI Stock Analysis