Want to see JP:7012 full AI Analyst Report?
Top Page
Kawasaki Heavy Industries
(7012)
Select Model
Select Model
Rating:56Neutral
Price Target:
¥2,346.00
▼(-10.68% Downside)
Action:Reiterated
Date:08/10/26
The score is anchored by improving profitability and balance sheet trends, but it is held back materially by weak TTM free cash flow and low cash conversion. Technical indicators also lean mixed-to-bearish (negative MACD and price below key longer-term averages), while valuation is acceptable but not compelling given the modest dividend yield.
Positive Factors
Revenue and margin expansion
Kawasaki has built a larger and more profitable earnings base, with sustained revenue expansion and margins recovering well above the FY2024 trough. This operating improvement can strengthen reinvestment capacity and support more resilient earnings over the next several quarters.
Negative Factors
Weak free cash flow
Very weak and deteriorating cash conversion reduces confidence that reported earnings are translating into internally available funds. The sharply lower free cash flow can constrain debt reduction, investment, and shareholder returns, while indicating continued working-capital or capital-spending pressure.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and margin expansion
Kawasaki has built a larger and more profitable earnings base, with sustained revenue expansion and margins recovering well above the FY2024 trough. This operating improvement can strengthen reinvestment capacity and support more resilient earnings over the next several quarters.
Read all positive factors
Kawasaki Heavy Industries (7012) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥2.00T
Dividend Yield1.73%
Average Volume (3M)9.65M
Price to Earnings (P/E)15.8
Beta (1Y)2.27
Revenue Growth8.87%
EPS Growth55.83%
CountryJP
Employees40,640
SectorIndustrials
Sector Strength72
IndustryConglomerates
Share Statistics
EPS (TTM)143.06
Shares Outstanding876,959,000
10 Day Avg. Volume9,066,320
30 Day Avg. Volume9,654,630
Financial Highlights & Ratios
PEG Ratio0.97
Price to Book (P/B)2.76
Price to Sales (P/S)1.05
P/FCF Ratio54.92
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥3,611.67Price Target Upside37.51% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)142.47
Revenue Forecast (FY)¥2.57T
Kawasaki Heavy Industries Business Overview & Revenue Model
Company Description
Kawasaki Heavy Industries, Ltd., established in Tokyo, Japan, in 1878, is a global industrial conglomerate with operations spanning numerous key sectors. The company's extensive activities include developing aerospace systems, providing energy sol...
How the Company Makes Money
Kawasaki Heavy Industries makes money primarily by manufacturing and selling industrial products and large-scale systems, and by providing engineering and after-sales services tied to those products. Key revenue streams include: (1) Product sales ...
Kawasaki Heavy Industries Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q1-2025)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements such as record revenue and advancements in hydrogen and robotics. However, challenges in profitability and cash flow, as well as the impact of U.S. tariffs, balanced the positive aspects.Positive Updates
Record Revenue and Year-on-Year Increase in Business Profit
The company achieved record revenue and a year-on-year increase in business profit for the first quarter of fiscal year 2025, meeting performance forecasts.
Negative Updates
Decrease in Quarterly Profit Before Tax
Despite a year-on-year increase in business profit, there was a decrease in quarterly profit before tax due to foreign exchange gains contraction and other factors.
Read all updates
Q1-2025 Updates
Positive
Negative
Record Revenue and Year-on-Year Increase in Business Profit
The company achieved record revenue and a year-on-year increase in business profit for the first quarter of fiscal year 2025, meeting performance forecasts.
Read all positive updates
Company Guidance
In the first quarter of fiscal year 2025, the company reported record revenue of JPY 488.4 billion and a business profit of JPY 20.5 billion. However, quarterly profit before tax decreased to JPY 16.8 billion, primarily due to a JPY 3.2 billion negative impact from foreign exchange rates as the yen appreciated. Orders received totaled JPY 446.3 billion. Despite meeting the full year performance forecast, the company maintained its full year forecast unchanged, adjusting for U.S. tariff impacts and a revised exchange rate assumption of JPY 145 to the dollar and JPY 165 to the euro. The net debt-to-equity ratio was 78.7%, and a loss of JPY 45.8 billion was recorded in free cash flows. In segment analyses, Rolling Stock saw a business profit increase of JPY 5.1 billion due to improved profitability, while Aerospace Systems revised its business profit forecast upward by JPY 8.0 billion. The Energy Solution and Marine Engineering segment also raised its profit forecast by JPY 7.0 billion. Conversely, the Powersports and Engine segment faced downward revisions in both revenue and profit forecasts due to U.S. tariff costs and weakening demand. The company is also actively pursuing next-generation ventures, such as a commercial-scale liquefied hydrogen base and advancements in robotic-assisted surgery systems.Kawasaki Heavy Industries Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
45
Neutral
| Breakdown | TTM | Mar 2026 | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.37T | 2.31T | 2.13T | 1.85T | 1.73T | 1.50T |
| Gross Profit | 473.21B | 454.92B | 431.54B | 312.24B | 333.82B | 256.58B |
| EBITDA | 266.96B | 270.62B | 214.33B | 117.88B | 157.46B | 123.18B |
| Net Income | 119.58B | 108.16B | 88.00B | 25.38B | 53.03B | 21.80B |
Balance Sheet | ||||||
| Total Assets | 3.27T | 3.32T | 3.02T | 2.68T | 2.46T | 2.17T |
| Cash, Cash Equivalents and Short-Term Investments | 73.29B | 115.41B | 132.78B | 84.15B | 138.42B | 108.51B |
| Total Debt | 889.09B | 861.19B | 889.51B | 845.23B | 785.26B | 666.84B |
| Total Liabilities | 2.31T | 2.38T | 2.29T | 2.03T | 1.86T | 1.65T |
| Stockholders Equity | 885.14B | 878.12B | 702.91B | 634.09B | 576.20B | 505.48B |
Cash Flow | ||||||
| Free Cash Flow | 7.46B | 44.09B | 50.26B | -48.40B | -35.33B | 97.95B |
| Operating Cash Flow | 119.40B | 140.07B | 148.94B | 31.66B | 23.62B | 156.89B |
| Investing Cash Flow | -109.42B | -128.05B | -111.20B | -89.81B | -77.46B | -58.40B |
| Financing Cash Flow | -15.20B | -33.23B | 9.61B | 12.91B | 85.31B | -108.90B |
Kawasaki Heavy Industries Technical Analysis
Negative
2626.50
Price Trends
2520.91
Negative
2696.02
Negative
2825.06
Negative
Market Momentum
-58.58
Negative
31.76
Neutral
7.48
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7012, the sentiment is Negative. The current price of 2626.5 is above the 20-day moving average (MA) of 2347.03, above the 50-day MA of 2520.91, and below the 200-day MA of 2825.06, indicating a bearish trend. The MACD of -58.58 indicates Negative momentum. The RSI at 31.76 is Neutral, neither overbought nor oversold. The STOCH value of 7.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7012.
Kawasaki Heavy Industries Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | ¥1.18T | 21.01 | 10.95% | 2.02% | 9.27% | -1.77% | |
69 Neutral | ¥715.05B | 18.54 | 5.80% | 2.23% | 7.75% | ― | |
68 Neutral | ¥2.83T | 13.42 | 33.08% | 0.84% | 3.94% | 91.76% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | ¥2.19T | 26.86 | 15.47% | 1.39% | 8.62% | 8.06% | |
56 Neutral | ¥2.00T | 15.77 | 14.35% | 1.73% | 8.87% | 55.83% | |
42 Neutral | ¥2.30T | -4.24 | -36.26% | 2.27% | 3.77% | -443.21% |
* Industrials Sector Average
JP:7012
Kawasaki Heavy Industries
2,261.00
315.23
16.20%
JP:6361
Ebara
4,620.00
772.40
20.07%
JP:7013
IHI
2,571.50
-294.82
-10.29%
JP:6594
Nidec
1,877.00
-662.50
-26.09%
JP:6302
Sumitomo Heavy Industries
6,058.00
2,493.24
69.94%
JP:6841
Yokogawa Electric
4,558.00
266.12
6.20%
Kawasaki Heavy Industries Corporate Events
Kawasaki Pushes Physical AI to Transform Manufacturing and Lifestyles
Oct 6, 2026
Kawasaki Heavy Industries is positioning itself as a leader in applying artificial intelligence to physical products, leveraging its broad industrial portfolio to integrate advanced automation into manufacturing and everyday technologies. By focus...
Kawasaki Heavy Industries Pivots to Physical AI and Strategic Growth Domains
Oct 6, 2026
Kawasaki Heavy Industries is prioritizing investment across four strategic domains: a safe and secure remotely connected society, advanced smart mobility, energy and environmental solutions, and defense. These focus areas reflect its broad footpri...
Kawasaki Refocuses Energy Strategy Amid AI-Driven Power Demand and Climate Risks
Oct 6, 2026
Kawasaki Heavy Industries is sharpening its strategic focus on energy and environmental solutions as part of a broader portfolio that includes defense, advanced smart mobility, and physical AI. The company positions itself to serve a more connecte...
Kawasaki Heavy Industries Maps Out 2030 Strategy Around Defense, Energy and Physical AI
Oct 6, 2026
Kawasaki Heavy Industries has outlined its Group Vision 2030 investment priorities, highlighting four key areas: defense, energy, physical AI and broader company-wide initiatives. The focus signals a strategic shift toward high-value defense and e...
Kawasaki Heavy Lifts FY2026 Profit Outlook After Strong First Quarter
Aug 7, 2026
Kawasaki Heavy Industries reported a strong start to fiscal 2026, with first-quarter consolidated business profit rising to ¥35.7 billion, up ¥15.2 billion year on year. The Precision Systems Equipment segment drove much of the improvem...
Kawasaki Heavy Industries Lifts Full-Year Outlook After Profit Rebound and Stock Split
Aug 7, 2026
Kawasaki Heavy Industries reported consolidated results for the three months ended June 30, 2026, showing year-on-year revenue growth and a sharp rebound in profitability, with profit before tax and profit attributable to owners of the parent more...
Kawasaki Heavy Industries Sets Terms for Major Share and Convertible Bond Offering
Jul 14, 2026
Kawasaki Heavy Industries has set the issue price and key terms for a major international equity offering, pricing new shares at ¥2,609 each for total proceeds of about ¥97.4 billion. The transaction will boost stated capital and additio...
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.