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Kobe Steel Ltd (JP:5406)
:5406
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Kobe Steel (5406) AI Stock Analysis

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JP:5406

Kobe Steel

(5406)

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Neutral 69 (OpenAI - 5.2)
Rating:69Neutral
Price Target:
¥2,175.00
▲(7.01% Upside)
Action:Reiterated
Date:08/17/26
The score is primarily supported by improved financial health (notably reduced leverage) and decent profitability versus earlier years, plus a reasonable valuation with a solid dividend yield. This is tempered by signs of late-cycle pressure (FY2026 revenue decline and margin compression from FY2024 highs) and mixed, mostly neutral technical signals.
Positive Factors
Deleveraging
Sustained deleveraging and rising equity strengthen financial resilience, reduce interest and refinancing risk, and give Kobe Steel greater flexibility to fund operations and investment through industrial cycles.
Negative Factors
Revenue Contraction
The recent revenue decline suggests demand has cooled across the cyclical industrial portfolio. Prolonged weakness in automotive, construction, infrastructure, or manufacturing customers could constrain volumes and limit operating leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
Deleveraging
Sustained deleveraging and rising equity strengthen financial resilience, reduce interest and refinancing risk, and give Kobe Steel greater flexibility to fund operations and investment through industrial cycles.
Read all positive factors

Kobe Steel (5406) vs. iShares MSCI Japan ETF (EWJ)

Kobe Steel Business Overview & Revenue Model

Company Description
Kobe Steel, Ltd. is a diversified Japanese industrial group with extensive operations in materials manufacturing, machinery production, and electric power generation. The company serves global markets spanning Japan, the Americas, Europe, the Midd...
How the Company Makes Money
Kobe Steel makes money primarily by manufacturing and selling industrial products and related services across its major business lines. A key revenue stream is the sale of materials—particularly steel products—where the company earns revenue from ...

Kobe Steel Financial Statement Overview

Summary
Fundamentals have improved versus earlier years, supported by better profitability since FY2023 and a clear de-leveraging trend (debt-to-equity ~0.61 in FY2026 vs ~1.47 in FY2021). Offsetting this, results appear more cyclical recently with FY2026 revenue down (-3.82%) and margins easing from FY2024 peaks, while free cash flow conversion remains volatile and modest versus net income (~38% in FY2026).
Income Statement
70
Positive
Balance Sheet
76
Positive
Cash Flow
63
Positive
BreakdownTTMMar 2026Mar 2026Mar 2025Mar 2024Mar 2023
Income Statement
Total Revenue2.45T2.44T2.56T2.54T2.47T2.08T
Gross Profit397.90B403.22B434.19B446.60B331.44B316.08B
EBITDA230.02B258.23B278.02B296.53B224.49B202.92B
Net Income67.28B93.72B120.18B109.55B72.57B60.08B
Balance Sheet
Total Assets2.83T2.87T2.89T2.92T2.87T2.73T
Cash, Cash Equivalents and Short-Term Investments176.23B189.23B220.12B278.84B203.52B260.70B
Total Debt734.00B769.92B889.81B874.73B908.14B961.14B
Total Liabilities1.51T1.53T1.65T1.79T1.90T1.86T
Stockholders Equity1.26T1.26T1.16T1.06T913.96B815.33B
Cash Flow
Free Cash Flow0.0077.25B34.99B110.42B20.73B12.36B
Operating Cash Flow0.00201.68B148.26B205.28B119.69B168.81B
Investing Cash Flow0.00-73.66B-113.87B-53.72B-97.27B-147.81B
Financing Cash Flow0.00-162.41B-96.23B-81.21B-85.56B-82.84B

Kobe Steel Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
¥472.27B12.827.28%2.99%4.19%31.79%
69
Neutral
¥799.00B11.857.80%4.03%-3.45%-50.06%
63
Neutral
¥206.47B18.965.08%1.80%2.78%24.29%
61
Neutral
$10.43B7.12-0.05%2.87%2.86%-36.73%
60
Neutral
¥1.11T12.412.76%4.46%-3.75%31.87%
60
Neutral
¥3.62T12.160.33%11.30%27.76%
60
Neutral
¥189.14B18.274.46%2.87%-12.89%-45.51%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:5406
Kobe Steel
2,022.00
283.06
16.28%
JP:5471
Daido Steel Co
2,257.00
1,025.43
83.26%
JP:5411
JFE Holdings
1,839.00
77.03
4.37%
JP:5401
NIPPON STEEL
671.00
72.13
12.04%
JP:5423
Tokyo Steel Manufacturing Co
1,731.00
123.15
7.66%
JP:5482
Aichi Steel Corporation
3,210.00
458.44
16.66%

Kobe Steel Corporate Events

Kobe Steel Profit Slumps Despite Higher Sales, Keeps Dividend Outlook
Aug 5, 2026
Kobe Steel reported consolidated net sales of ¥578.3 billion for the three months ended June 30, 2026, up 1.6% year on year, but operating profit fell 34.8% to ¥20.4 billion and profit attributable to owners of parent plunged 68.4% to &#...
Kobe Steel Lowers Conversion Prices on 2028 and 2030 Convertible Bonds After Extraordinary Dividend
May 20, 2026
Kobe Steel has adjusted the conversion prices on its zero coupon convertible bonds maturing in 2028 and 2030, reflecting changes triggered by recent corporate actions. The conversion price for the 2028 bonds was reduced from ¥2,212.8 to &#165...
Kobe Steel Cuts Annual Dividend Payout While Meeting Forecast
May 20, 2026
Kobe Steel, Ltd. has approved a year-end cash dividend of 40 yen per share for the fiscal year ended March 31, 2026, with the payment sourced from retained earnings and effective June 5, 2026. The total payout will be 15,839 million yen, aligning ...
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: Aug 17, 2026