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Kawasaki Heavy Industries Ltd. (JP:7012)
:7012
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Kawasaki Heavy Industries
(OTC:7012)
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Rating:64Neutral
Price Target:
¥10,037.00
▲(9.07% Upside)
Kawasaki Heavy Industries is on a stable financial footing with solid revenue growth and profitability. However, cash flow challenges and operational efficiency improvements are needed. The technical indicators suggest potential bearish trends, and the valuation indicates moderate pricing. The earnings call provided a balanced view with both significant achievements and challenges.
Kawasaki Heavy Industries (7012) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
$1.54T
Dividend Yield1.68%
Average Volume (3M)5.47M
Price to Earnings (P/E)20.0
Beta (1Y)1.95
Revenue Growth15.11%
EPS Growth142.87%
CountryJP
Employees39,689
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)25.39
Shares Outstanding167,921,800
10 Day Avg. Volume4,846,460
30 Day Avg. Volume5,470,556
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)2.13
Price to Sales (P/S)0.70
P/FCF Ratio42.36
Enterprise Value/Market Cap1.70
Enterprise Value/Revenue1.21
Enterprise Value/Gross Profit6.00
Enterprise Value/Ebitda11.90
Forecast
1Y Price Target
$11,733.59Price Target Upside27.51% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Kawasaki Heavy Industries Business Overview & Revenue Model
Company DescriptionKawasaki Heavy Industries, Ltd. engages in aerospace systems, energy solution and marine engineering, precision machinery and robot, rolling stock, and motorcycle and engine businesses in Japan and internationally. It manufactures aircraft for the Japan ministry of defense; helicopters; and helicopter engines and jet engines for commercial aircrafts. The company also manufactures railway cars; a range of rolling stocks, including Shinkansen, electric cars, passenger coaches, freight cars, locomotives, diesel locomotives, transit systems, and snow plows. In addition, it engages in the production and sale of energy-related machinery and systems, marine machinery and systems, industrial equipment, environmental equipment, ultralow temperature tanks, hydrogen-related structures, crushers, ships, other vessels, etc. Further, the company manufactures and supplies motorcycles, off-road four wheelers, watercrafts, general-purpose gasoline engines, etc. Additionally, it manufactures and sells hydraulic machinery used in construction and agricultural machinery, industrial machinery, and ships; pumps, motors, valves, and various hydraulic machinery, as well as assembles hydraulic systems; and industrial robots for use in welding, assembly, handling, painting, and palletization for various industries, including automotive and electronics industries. Kawasaki Heavy Industries, Ltd. was founded in 1878 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyKawasaki Heavy Industries generates revenue through its diversified business operations, which are segmented into several key areas. The Aerospace Systems division manufactures aircraft engines and components, servicing both commercial and defense sectors. The Energy System & Plant Engineering segment provides equipment and services for power plants, industrial machinery, and environmental solutions. The Ship & Offshore Structure division designs and constructs ships and marine structures, catering to both commercial and military clients. The Rolling Stock division supplies railway vehicles and systems to transportation operators globally. Additionally, the Motorcycle & Engine segment sells motorcycles, ATVs, and personal watercraft. The company's Industrial Equipment division offers a range of products including industrial robots and machinery. Revenue streams are bolstered by strategic partnerships, government contracts, and continuous innovation in technology and engineering solutions.
Kawasaki Heavy Industries Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q1-2025)
| % Change Since: |
Next Earnings Date:Nov 11, 2025
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.Q1-2025 Updates
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.
Segment Growth in Precision Machinery and Robot
Year-on-year increases were recorded for orders received, revenue, and business profit in the Precision Machinery and Robot segment.
Positive Forecast for Energy Solution and Marine Engineering
Forecasts for orders received, revenue, and business profit have been revised upward due to strong business environment and improved profitability of individual projects.
Innovations in Hydrogen and Robotics
The company commenced construction of the world's first commercial scale liquefied hydrogen base and demonstrated the world's longest remote robotic-assisted surgery.
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.
Challenges in Powersports and Engine Segment
Business profit decreased due to U.S. tariff costs and weakened demand in U.S. Powersports, leading to a downward revision of forecasts.
Free Cash Flow Deterioration
A loss of JPY 45.8 billion in free cash flows was recorded, a deterioration of JPY 43.3 billion year-on-year.
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
Kawasaki Heavy Industries demonstrates solid revenue growth and profitability, with a strong equity position and no debt reliance. However, cash flow challenges and operational efficiency improvements are areas to watch.Income Statement
Kawasaki Heavy Industries shows a solid revenue growth rate of 2.08% TTM, indicating a positive trajectory. The gross profit margin of 20.27% and net profit margin of 4.13% TTM reflect stable profitability. However, the EBIT margin of 5.63% and EBITDA margin of 10.02% TTM suggest room for operational efficiency improvements.75
Positive
Balance Sheet
The company has a strong equity base with a debt-to-equity ratio of 0.0 TTM, indicating no reliance on debt financing. Return on equity is healthy at 13.20% TTM, showcasing effective use of equity. However, the equity ratio is not provided, limiting a full assessment of asset financing.70
Positive
Cash Flow
Operating cash flow is positive, but the free cash flow growth rate is negative at -26.26% TTM, indicating potential cash flow challenges. The operating cash flow to net income ratio of 0.08 TTM suggests limited cash generation relative to net income, while the free cash flow to net income ratio of 0.34 TTM shows some cash flow support.60
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.17T | 2.13T | 1.85T | 1.73T | 1.50T | 1.49T |
| Gross Profit | 437.93B | 431.54B | 312.24B | 333.82B | 253.26B | 191.16B |
| EBITDA | 220.70B | 239.98B | 130.22B | 154.01B | 109.92B | 50.36B |
| Net Income | 76.87B | 88.00B | 25.38B | 53.03B | 12.64B | -19.33B |
Balance Sheet | ||||||
| Total Assets | 2.97T | 3.02T | 2.68T | 2.46T | 2.17T | 1.96T |
| Cash, Cash Equivalents and Short-Term Investments | 73.90B | 144.55B | 95.18B | 138.42B | 119.12B | 126.70B |
| Total Debt | 820.54B | 889.51B | 845.23B | 785.26B | 501.48B | 571.35B |
| Total Liabilities | 2.17T | 2.29T | 2.03T | 1.86T | 1.65T | 1.48T |
| Stockholders Equity | 735.91B | 702.91B | 634.09B | 576.20B | 505.48B | 465.33B |
Cash Flow | ||||||
| Free Cash Flow | 37.06B | 50.26B | -48.40B | -35.33B | 97.95B | -17.09B |
| Operating Cash Flow | 117.57B | 148.94B | 31.66B | 23.62B | 156.89B | 34.60B |
| Investing Cash Flow | -123.21B | -111.20B | -89.81B | -77.46B | -58.40B | -37.39B |
| Financing Cash Flow | -30.25B | 9.61B | 12.91B | 85.31B | -108.90B | 23.09B |
Kawasaki Heavy Industries Technical Analysis
Negative
9202.00
Price Trends
9781.47
Negative
9907.45
Negative
8743.63
Positive
Market Momentum
-16.56
Negative
43.55
Neutral
18.96
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 9202 is below the 20-day moving average (MA) of 9284.10, below the 50-day MA of 9781.47, and above the 200-day MA of 8743.63, indicating a neutral trend. The MACD of -16.56 indicates Negative momentum. The RSI at 43.55 is Neutral, neither overbought nor oversold. The STOCH value of 18.96 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 |
|---|---|---|---|---|---|---|---|
81 Outperform | €92.76B | 9.49 | 9.64% | 3.32% | -6.82% | -40.90% | |
78 Outperform | $1.66T | 22.59 | 16.02% | 1.42% | 16.57% | 6.63% | |
67 Neutral | $2.75T | 25.48 | 23.85% | 0.79% | 17.79% | ― | |
64 Neutral | $1.54T | 20.05 | 11.02% | 1.68% | 15.11% | 142.87% | |
63 Neutral | ¥628.28B | 33.56 | 10.57% | 0.96% | 9.43% | 21.15% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
57 Neutral | ¥426.19B | 709.43 | -0.47% | 3.59% | -4.25% | -110.18% |
* Industrials Sector Average
JP:7012
Kawasaki Heavy Industries
9,202.00
2,939.65
46.94%
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Kawasaki Heavy Industries Corporate Events
Kawasaki Heavy Industries Addresses Testing Misconduct in Marine Engines
Aug 28, 2025
Kawasaki Heavy Industries has identified misconduct in the testing of its marine and submarine engines, prompting an independent investigation by a Special Investigative Committee. The company is taking steps to address these issues by reinforcing compliance and governance frameworks, and is cooperating fully with the ongoing investigation to restore trust and ensure transparency. The potential financial impact of these findings is still under examination.
The most recent analyst rating on (JP:7012) stock is a Hold with a Yen10108.00 price target. To see the full list of analyst forecasts on Kawasaki Heavy Industries stock, see the JP:7012 Stock Forecast page.
Kawasaki Heavy Industries Reports Strong Q1 FY2025 Performance
Aug 6, 2025
Kawasaki Heavy Industries reported a business profit of 20.5 billion yen for the first quarter of FY2025, marking a 3.5 billion yen increase year-over-year. Despite the minimal impact of U.S. tariff policies, the company maintains its full-year profit forecast at 145.0 billion yen, adjusting its assumed exchange rate to 145 yen per US dollar for the remainder of the fiscal year.
The most recent analyst rating on (JP:7012) stock is a Buy with a Yen12800.00 price target. To see the full list of analyst forecasts on Kawasaki Heavy Industries stock, see the JP:7012 Stock Forecast page.
Kawasaki Heavy Industries Reports Q2 2025 Financial Results
Aug 6, 2025
Kawasaki Heavy Industries reported its consolidated financial results for the three months ending June 30, 2025, showing a 10% increase in revenue compared to the same period in 2024. Despite the revenue growth, the company experienced a significant decline in profit attributable to owners of the parent, indicating potential challenges in maintaining profitability amidst market conditions.
The most recent analyst rating on (JP:7012) stock is a Buy with a Yen12800.00 price target. To see the full list of analyst forecasts on Kawasaki Heavy Industries stock, see the JP:7012 Stock Forecast page.
Kawasaki Heavy Industries Addresses Submarine Repair Misconduct
Jul 30, 2025
Kawasaki Heavy Industries has identified misconduct in its submarine repair business, prompting a special investigation by Japan’s Ministry of Defense and an internal committee. In response, the company has revised its repair contract processes, restructured its defense operations, and taken disciplinary actions against involved personnel to prevent future misconduct and restore trust.
The most recent analyst rating on (JP:7012) stock is a Buy with a Yen12800.00 price target. To see the full list of analyst forecasts on Kawasaki Heavy Industries stock, see the JP:7012 Stock Forecast page.
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.