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Mitsubishi Heavy Industries
(7011)
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Rating:73Outperform
Price Target:
¥4,520.00
▲(14.55% Upside)
Action:Upgraded
Date:08/21/26
The score is driven primarily by improving fundamentals—stronger margins, reduced leverage, and sharply better cash generation—reinforced by a positive earnings call with raised order intake and free cash flow guidance. The main offsets are a rich valuation (high P/E and low yield) and only moderate technicals, with the price still below longer-term moving averages and results partly boosted by one-time gains.
Positive Factors
Large backlog supports multi-period revenue visibility
The expanding backlog provides multi-period visibility for a project-driven industrial business, supporting future capacity utilization and revenue conversion. It also indicates sustained customer demand across MHI’s large infrastructure and engineering markets.
Negative Factors
Top-line growth has decelerated
Slowing revenue growth may limit further operating leverage and margin expansion if demand weakens. For a diversified industrial group, modest top-line momentum can also make earnings more dependent on mix, project timing and cost control.
Read all positive and negative factors
Positive Factors
Negative Factors
Large backlog supports multi-period revenue visibility
The expanding backlog provides multi-period visibility for a project-driven industrial business, supporting future capacity utilization and revenue conversion. It also indicates sustained customer demand across MHI’s large infrastructure and engineering markets.
Read all positive factors
Mitsubishi Heavy Industries (7011) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥13.52T
Dividend Yield0.64%
Average Volume (3M)16.75M
Price to Earnings (P/E)33.0
Beta (1Y)1.66
Revenue Growth-2.63%
EPS Growth58.50%
CountryJP
Employees78,793
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)118.62
Shares Outstanding3,373,647,700
10 Day Avg. Volume14,403,980
30 Day Avg. Volume16,747,886
Financial Highlights & Ratios
PEG Ratio1.21
Price to Book (P/B)4.59
Price to Sales (P/S)2.85
P/FCF Ratio18.63
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥5,485.71Price Target Upside39.02% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)128.52
Revenue Forecast (FY)¥5.57T
Mitsubishi Heavy Industries Business Overview & Revenue Model
Company Description
Mitsubishi Heavy Industries, Ltd. operates globally as a prominent manufacturer and distributor of a diverse range of heavy industrial machinery and infrastructure solutions. The company's vast operations are structured into distinct segments: Ene...
How the Company Makes Money
Mitsubishi Heavy Industries makes money primarily by delivering engineered products and large turnkey projects, and by providing ongoing aftermarket services for the equipment and systems it installs. Key revenue streams include: (1) Product and p...
Mitsubishi Heavy Industries Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Positive
The call conveyed materially positive operational and financial momentum: record Q1 revenue, strong order intake and backlog, very large increases in business profit and net income, robust cash generation and an upgraded order intake and free cash flow outlook. However, several caveats temper the optimism—JPY 25 billion of one-time gains contributed materially to Q1 profit, some subsegments (Metals Machinery, Machinery Systems) showed weakness, Aircraft & Defense experienced a drop in new orders versus a high prior-year base, and management kept full-year revenue and profit guidance unchanged while excluding geopolitical uncertainty. On balance the strong results, cash position and upgraded order/free cash flow guidance outweigh the risks, though sustainability of the Q1 margin jump depends on repeatable execution and macro/Fx stability.Positive Updates
Record Quarterly Results
Q1 FY2026 revenue rose 16% year-on-year to JPY 1,194.2 billion; business profit increased 65% YoY to JPY 159.6 billion; net income rose 97% YoY to JPY 134.6 billion. All four major metrics (order intake, revenue, business profit, net income) reached Q1 record highs.
Negative Updates
Reliance on One-Time Gains in Q1 Profit Improvement
Of the JPY 38 billion margin improvement in Q1, JPY 25 billion was one-time gains (JPY 15 billion contract price finalization and ~JPY 10 billion from asset sales). This raises questions about the sustainability of the elevated quarterly profit levels.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Quarterly Results
Q1 FY2026 revenue rose 16% year-on-year to JPY 1,194.2 billion; business profit increased 65% YoY to JPY 159.6 billion; net income rose 97% YoY to JPY 134.6 billion. All four major metrics (order intake, revenue, business profit, net income) reached Q1 record highs.
Read all positive updates
Company Guidance
On guidance, MHI raised its full-year order intake target to JPY 7.0 trillion (including increases of JPY 100 billion each for GTCC and Defense & Space), lifted free cash flow guidance by JPY 300 billion to JPY 600 billion, and kept revenue, business profit and net income unchanged from the prior forecast; business profit guidance remains JPY 540 billion (which includes a JPY 20 billion one‑time risk buffer). The company assumes an FX rate of JPY 150/USD with FX exposure on a business‑profit basis of $3.2 billion, notes that Q1 already included JPY 25 billion of onetime gains (already factored into the full‑year plan) and that JPY 55 billion of an expected JPY 83 billion full‑year benefit from revenue/margin improvements has been recognized in Q1, while the forecast does not incorporate any potential impact from the evolving situation in the Middle East.Mitsubishi Heavy Industries Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
78
Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Mar 2026 | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.97T | 4.97T | 5.03T | 4.66T | 4.20T | 3.86T |
| Gross Profit | 1.10T | 1.08T | 1.00T | 906.33B | 740.40B | 633.61B |
| EBITDA | 697.97B | 702.89B | 557.52B | 482.05B | 351.72B | 307.43B |
| Net Income | 398.58B | 332.13B | 245.45B | 222.02B | 130.45B | 113.54B |
Balance Sheet | ||||||
| Total Assets | 8.15T | 8.27T | 6.66T | 6.26T | 5.47T | 5.12T |
| Cash, Cash Equivalents and Short-Term Investments | 1.68T | 1.33T | 657.82B | 431.29B | 347.66B | 314.26B |
| Total Debt | 853.82B | 876.24B | 1.13T | 1.14T | 1.19T | 1.08T |
| Total Liabilities | 4.91T | 5.04T | 4.19T | 3.90T | 3.64T | 3.45T |
| Stockholders Equity | 3.17T | 3.09T | 2.35T | 2.24T | 1.74T | 1.58T |
Cash Flow | ||||||
| Free Cash Flow | 966.14B | 761.55B | 289.77B | 170.70B | -51.02B | 156.31B |
| Operating Cash Flow | 1.14T | 942.62B | 530.46B | 331.19B | 80.89B | 285.56B |
| Investing Cash Flow | 83.05B | -49.17B | -189.52B | -131.05B | -45.58B | 16.31B |
| Financing Cash Flow | -308.82B | -274.55B | -112.32B | -158.90B | -18.90B | -255.77B |
Mitsubishi Heavy Industries Technical Analysis
Negative
3946.00
Price Trends
3902.92
Negative
4051.30
Negative
4243.27
Negative
Market Momentum
11.94
Positive
44.84
Neutral
17.28
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7011, the sentiment is Negative. The current price of 3946 is below the 20-day moving average (MA) of 4053.15, above the 50-day MA of 3902.92, and below the 200-day MA of 4243.27, indicating a bearish trend. The MACD of 11.94 indicates Positive momentum. The RSI at 44.84 is Neutral, neither overbought nor oversold. The STOCH value of 17.28 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7011.
Mitsubishi Heavy Industries Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | ¥3.01T | 24.59 | 6.76% | 0.78% | 5.35% | 26.51% | |
73 Outperform | ¥13.52T | 33.04 | 12.52% | 0.63% | -2.63% | 58.50% | |
69 Neutral | ¥694.96B | 17.54 | 4.72% | 2.56% | 7.75% | ― | |
68 Neutral | ¥2.99T | 14.69 | 28.66% | 0.69% | 3.94% | 91.76% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | ¥2.14T | 26.83 | 15.94% | 1.13% | 8.62% | 8.06% | |
62 Neutral | ¥2.30T | 18.11 | 13.59% | 1.23% | 8.87% | 55.83% |
* Industrials Sector Average
JP:7011
Mitsubishi Heavy Industries
3,856.00
171.21
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Mitsubishi Heavy Industries Corporate Events
Mitsubishi Heavy Industries Updates Q1 FY2026 Results and Segment Structure
Aug 4, 2026
Mitsubishi Heavy Industries has released its Q1 FY2026 financial results and earnings forecast, outlining performance, segment breakdowns, and forward guidance for the current fiscal year. The disclosure covers an overview of profitability and fin...
Mitsubishi Heavy Industries Delivers Strong Q1 and Plans Higher FY2026 Dividend
Aug 4, 2026
Mitsubishi Heavy Industries reported a strong start to FY2026, with first-quarter revenue rising 15.5% year on year to ¥1.19 trillion and profit from business activities jumping 65.1% to ¥159.6 billion. Profit attributable to owners of t...
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.