Investment view · 6473

JTEKT (6473)

As of 2026-10-17 · TSE Prime · Transportation equipment (輸送用機器) · FY ends March · IFRS · Price ¥2,138 (2026-10-16 close)

Bottom line

RatingHold
Thesis typeTurnaround (unconfirmed)
Price¥2,1382026-10-16
Base case¥2,090−2% from today
Scorecard60 / 100
ConfidenceMedium
From 52w high−5.6%

JTEKT's operations are clearly recovering. Business profit (事業利益, before other income and expenses) rose 62% YoY in Q1 FY2027/03 to ¥22.7bn, the loss-making European auto business was sold on 2026-07-31, and Q1 business profit is 25.3% of the ¥90bn full-year guide, against 18.6% in the same quarter last year. The market has seen this: the stock is up 47.8% in a year (+20.8 pts vs TOPIX), consensus OP of ¥83.8bn is already 11.8% above the ¥75bn guide, and the stock trades at 11.1x forward consensus PER, a little above its own band mean (z +0.26), with PBR 0.84x at its band mean. The remaining edge is FY2028/03: if the clean, post-Europe margin holds, consensus EPS of about ¥215 at band-mean PER gives about +10% plus a 3.3% yield. But management missed its initial OP guide by 50% last year, so wait for the Q2 results on 2026-10-29 before you add.

The most important missing evidence is how much of the ¥15bn gap between the business-profit guide and the OP guide is European divestment loss, and how much is recurring restructuring cost. The Q2 presentation should show this.

Signal panel

Recognition gapNone

Covered by Japanese and foreign brokers (IFIS target ¥2,748; recent moves 2026-08-17 to 2026-10-07 range ¥2,300 to ¥3,080); a 24.24% Toyota-owned supplier is well understood.

Upward-revision probabilityMedium

Q1 OP progress 30.4% vs a 28.0% seasonal median (+2.4 pts, below the +8 threshold), but business-profit progress is 25.3% vs 18.6% last year, and the ¥75bn OP guide was left unchanged on 2026-07-31. Consensus already sits +11.8% above guidance.

Value-trap riskLow

OCF ¥108.5bn in FY2026/03 (9.1x NP), net debt only ¥90.5bn (net D/E 11.4%), and estimates are flat to slightly up (FY27 OP +1.0% over 3m).

IR credibilityMixed

FY2026/03 initial OP guide ¥50bn was cut to ¥22bn on 2026-03-19 (actual ¥24.8bn); ROE target 7–8% for FY2026 (this fiscal year) against a 6.2% guide; cost of capital still not disclosed (JTEKT Report 2026 p.59).

Evidence confidenceMedium

Q1 and FY 短信, 有報 and integrated report read; Q1 presentation not in the snapshot; peer ROE derived from PBR ÷ PER rather than filings.

Investment thesis

  1. Operations are inflecting. Business profit FY2025/03 ¥64.9bn → FY2026/03 ¥75.7bn (+16.5%) → Q1 FY2027/03 ¥22.7bn (+62.1% YoY), with a 4.6% margin against 3.1% a year ago (Q1 短信 p.1). Automotive segment profit rose 158% to ¥15.8bn on yen weakness and cost reduction (Q1 短信 p.4 (printed 2)). Reported fact.
  2. The worst one-offs are behind. Other expenses were ¥56.8bn in FY2026/03, of which ¥35.8bn was restructuring costs (事業構造改善費用) for the sale of seven European auto subsidiaries, and ¥18.9bn of that was the write-down to fair value (有報 p.99, p.127). The sale closed on 2026-07-31, about one month early (company release 2026-07-31). The FY2027/03 guide implies ¥15bn of other expenses (business profit ¥90bn − OP ¥75bn, FY 短信 p.1). Q1 had a net +¥0.1bn. Reported fact / company guidance.
  3. Underlying EPS is about ¥190, not ¥157. If the ¥15bn implied other expense is treated as non-recurring and taxed at about 30%, NP would be about ¥60.5bn, or EPS about ¥190, which is 11.3x the price. Inference.
  4. Cash covers the dividend. FCF ¥55.8bn in FY2026/03 against dividends of ¥19.1bn; Q1 FCF ¥36.3bn (Q1 短信 p.12 (printed 10)). DPS goes from ¥60 to a ¥70 guide (5 consecutive increases; payout guide 44.6%, FY 短信 p.1). Reported fact / company guidance.
  5. But the price has moved first. +47.8% in 1y, 5.6% below the 52-week high of ¥2,265, and the price is at the mean-PER theoretical value of ¥2,101 (fact sheet, Valuation and Price). Reported fact.

Business and earnings

JTEKT makes electric power steering (world share No.1 since 1988, 24%), driveline parts, industrial bearings, and machine tools (JTEKT Report 2026 p.10). The Toyota group bought ¥821.4bn in FY2026/03, 42.7% of sales (FY 短信 p.16 (printed 14)), and Toyota Motor holds 24.24% (large-holding report, 2026-05). Automotive is 69% of segment sales and 62% of segment profit, but its margin is only 3.4%. Machine tools earn the highest margin, 7.4%, on 12% of sales (fact sheet, Segments 2026/03).

SegmentFY26 salesFY26 profitMarginQ1 FY27 profitYoY
Automotive¥1,369.7bn¥46.7bn3.4%¥15.8bn+158%
Industrial and bearings¥367.9bn¥11.2bn3.0%¥3.7bn−11%
Machine tools¥236.1bn¥17.4bn7.4%¥3.3bn−15%

Q1 FY2027/03 drivers (Q1 短信 p.4 (printed 2)):

  • Volume: auto sales rose in Japan, North America and Asia; China fell.
  • Currency: yen weakness is named as a driver in all three segments. The company assumes ¥156/$ for Q1 and ¥155/$ from Q2 (Q1 短信 p.5 (printed 3)). The BOJ market close was about ¥158/$ in mid-October (Matsui Securities, 2026-10-14). Sensitivity is not disclosed in the documents read. Unknown.
  • Cost: cost reduction and structural reform helped automotive and bearings.
  • Tariffs: US tariffs cut bearings profit, and machine tools had higher costs.

The business is cyclical (autos, plus machine-tool capex) and capital intensive (capex/depreciation 1.16 in FY2026/03, R&D 2.9% of sales). Overseas is 61.9% of sales; China is 7.8% (fact sheet, Regions).

RevenueFiscal years, ¥. E marks company guidance.
¥0¥500bn¥1tn¥1.5tn¥2tn2019/03 Revenue: ¥1.52tn2020/03 Revenue: ¥1.42tn2021/03 Revenue: ¥1.25tn2022/03 Revenue: ¥1.43tn2023/03 Revenue: ¥1.68tn2024/03 Revenue: ¥1.89tn2025/03 Revenue: ¥1.88tn2026/03 Revenue: ¥1.92tn¥1.92tn2027/03E Revenue: ¥1.88tn¥1.88tn2019/032020/032021/032022/032023/032024/032025/032026/032027/03E
Data
YearRevenueOPNPOPM
2019/03¥1.52tn¥63.7bn¥27.2bn4.2%
2020/03¥1.42tn¥16.2bn−¥3.8bn1.1%
2021/03¥1.25tn¥12.9bn¥800mn1%
2022/03¥1.43tn¥36.4bn¥20.7bn2.5%
2023/03¥1.68tn¥49.3bn¥34.3bn2.9%
2024/03¥1.89tn¥62.2bn¥40.3bn3.3%
2025/03¥1.88tn¥38.5bn¥13.7bn2%
2026/03¥1.92tn¥24.8bn¥12bn1.3%
2027/03E¥1.88tn¥75bn¥50bn4%

factsheet.json annual (zaimu_fy_all)

MarginsOperating and net margin, % of revenue
−2%0%2%4%6%2019/03 Operating margin: 4.2%2020/03 Operating margin: 1.1%2021/03 Operating margin: 1%2022/03 Operating margin: 2.5%2023/03 Operating margin: 2.9%2024/03 Operating margin: 3.3%2025/03 Operating margin: 2%2026/03 Operating margin: 1.3%2027/03E Operating margin: 4%4%2019/03 Net margin: 1.8%2020/03 Net margin: −0.3%2021/03 Net margin: 0.1%2022/03 Net margin: 1.4%2023/03 Net margin: 2%2024/03 Net margin: 2.1%2025/03 Net margin: 0.7%2026/03 Net margin: 0.6%2027/03E Net margin: 2.7%2.7%2019/032020/032021/032022/032023/032024/032025/032026/032027/03EOperating marginNet margin

factsheet.json annual

Where the profit comes from (2026/03)Each segment's share of total segment sales and of total segment profit. Sales include inter-segment sales.
0%20%40%60%80%自動車自動車 sales ¥1.37tn69%自動車 profit ¥46.7bn, margin 3.4%62%産機・軸受産機・軸受 sales ¥368bn19%産機・軸受 profit ¥11.2bn, margin 3%15%工作機械工作機械 sales ¥236bn12%工作機械 profit ¥17.4bn, margin 7.4%23%Share of salesShare of profit
Data
SegmentSalesProfitMarginSales YoY
自動車¥1.37tn¥46.7bn3.4%+2.5%
産機・軸受¥368bn¥11.2bn3%−1.3%
工作機械¥236bn¥17.4bn7.4%+5.2%

factsheet.json segments

Quarterly operating profitStandalone quarters, ¥
−¥20bn−¥10bn¥0¥10bn¥20bn¥30bn2024/03 Q2: ¥15.8bn, YoY −1.1%2024/03 Q3: ¥22.7bn, YoY +59%2024/03 Q4: ¥4.8bn, YoY −70%2025/03 Q1: ¥11.1bn, YoY −41%2025/03 Q2: ¥14.4bn, YoY −8.7%2025/03 Q3: ¥9.5bn, YoY −58%2025/03 Q4: ¥3.4bn, YoY −29%2026/03 Q1: ¥13.5bn, YoY +21%2026/03 Q2: ¥12.5bn, YoY −13%2026/03 Q3: ¥11.7bn, YoY +24%2026/03 Q4: −¥13bn, YoY −476%2027/03 Q1: ¥22.8bn, YoY +69%¥22.8bn24 Q224 Q324 Q425 Q125 Q225 Q325 Q426 Q126 Q226 Q326 Q427 Q1
Data
QuarterSalesOPNPOPMOP YoY
2024/03 Q2¥477bn¥15.8bn¥8.1bn3.3%−1.1%
2024/03 Q3¥490bn¥22.7bn¥13.3bn4.6%+59%
2024/03 Q4¥480bn¥4.8bn¥3.8bn1%−70%
2025/03 Q1¥464bn¥11.1bn¥10.8bn2.4%−41%
2025/03 Q2¥454bn¥14.4bn−¥4.6bn3.2%−8.7%
2025/03 Q3¥467bn¥9.5bn¥3.7bn2%−58%
2025/03 Q4¥499bn¥3.4bn¥3.8bn0.7%−29%
2026/03 Q1¥455bn¥13.5bn¥6.5bn3%+21%
2026/03 Q2¥475bn¥12.5bn¥5.7bn2.6%−13%
2026/03 Q3¥473bn¥11.7bn¥9.2bn2.5%+24%
2026/03 Q4¥522bn−¥13bn−¥9.4bn−2.5%−476%
2027/03 Q1¥492bn¥22.8bn¥13.8bn4.6%+69%

factsheet.json quarters (zaimu_4q_all)

Forecast test

  • Company guidance (2026-04-28, unchanged 2026-07-31): sales ¥1,880bn (−2.3%, after the European sale), business profit ¥90bn (+18.9%, margin 4.8%), OP ¥75bn (+201.8%), RP ¥70bn, NP ¥50bn, EPS ¥157.07, DPS ¥70 (FY 短信 p.1; Q1 短信 p.1). Management calls it a record profit (JTEKT Report 2026 p.5).
  • Consensus (IFIS, 2026-10-16): FY2027/03 OP ¥83.8bn (+11.8% vs guidance, +1.0% over 3m), NP ¥53.0bn; FY2028/03 OP ¥107.7bn (−3.5% over 3m), NP ¥68.6bn. External estimate.
  • Progress vs seasonal norm: Q1 OP 30.4% of guidance vs a 28.0% median of prior years at the guidance in force (+2.4 pts); sales 26.2% vs 24.4%; NP 27.7% vs 31.7% (fact sheet, Progress). The OP history is noisy because of one-offs, so business profit is the cleaner test. Q1 business profit is 25.3% of ¥90bn. Last year Q1 was 18.6% of the actual ¥75.7bn, with quarterly segment profit of ¥14.1bn, ¥18.9bn, ¥13.7bn and ¥28.7bn (fact sheet, Segment sales by quarter). Reaching ¥90bn needs ¥67.3bn in Q2 to Q4, 10% above last year's ¥61.3bn. Q1 alone was ¥8.7bn above its year-ago quarter. Inference: business profit is likely to beat ¥90bn unless the yen strengthens or tariffs worsen.
  • One-offs inside guidance: implied other expenses of ¥15bn. External summaries (FilingReader, 2026-05-27) cite an expected ¥5bn loss on the European sale in FY2027/03. If that is inside the ¥15bn, about ¥10bn is unexplained restructuring headroom, and that is where an OP beat would come from. EPS ex one-offs is about ¥190 (inference, see Thesis 3).
  • Track record: FY2026/03 initial OP ¥50bn, final ¥22bn, actual ¥24.8bn (−50.3% vs initial, fact sheet, Guidance). The 2026-03-19 cut came with the European charges. Earlier years have no initial guidance in the IFIS feed. FY2025/03 OP fell 38.2%. Treat management's OP guidance as unreliable in a restructuring year.
  • Revision probability: Medium. A raise at Q2 (2026-10-29) is plausible on business profit, but management tends to hold guidance until H2. Consensus at ¥83.8bn already prices most of the beat.
Progress against guidance, 2027/03 Q1Year to date as % of current full-year guidance. The tick is the median at the same quarter in prior years.
0%25%50%75%100%SalesSales: 26%26% (+1.8 pts)Median of prior years 24%Operating profitOperating profit: 30%30% (+2.4 pts)Median of prior years 28%Ordinary profitOrdinary profit: 31%31% (+7.1 pts)Median of prior years 24%Net profitNet profit: 28%28% (−4.0 pts)Median of prior years 32%Progress this yearBehind by more than 3 ptsSeasonal median

factsheet.json progress (zaimu_4q_acc, act_est_hist_n)

Financial strength and capital allocation

  • Balance sheet: equity ratio 50.5% at Q1 end; cash ¥168.5bn; net debt ¥90.5bn at FY2026/03 (net D/E 11.4%); current ratio 1.58 (fact sheet, Balance sheet; Q1 短信 p.1). Assets held for sale were ¥52.4bn at 2026-03-31 and left with the European sale (有報 p.99).
  • Cash conversion: OCF positive in every year shown; FY2024–26 OCF ¥154.5bn, ¥80.2bn, ¥108.5bn. Receivable days fell from 77.4 (FY22) to 61.7, and inventory days from 68.6 to 54.8.
  • Capital efficiency: ROE 1.6% in FY2026/03 = net margin 0.62% × asset turnover 1.22 × leverage 2.0. Margin is the whole problem; turnover has improved every year since FY22. The guide implies ROE of about 6.2%, which is below the mid-term target of 7–8% for this fiscal year and below an assumed 8–9% cost of equity (analyst assumption). The company sets WACC hurdle rates by business but does not publish them (JTEKT Report 2026 p.59). IFIS ROIC is 1.2% (IFIS definition). Peers on forecast ROE (PBR ÷ PER, Yahoo! Finance Japan 2026-10-16): NSK 4.2%, NTN 5.0%, Aisin 6.9%, JTEKT 6.2%.
  • Mid-term plan (FY2024–26) targets for this fiscal year (有報 p.41): ROE 7–8%, PBR 1.0x, business-profit margin 5–6%. Guidance gives 6.2%, 0.84x now, and 4.8%. All three are likely misses.
  • Returns: DPS ¥18 → ¥70 over five years. FY2025/03 had a ¥28.8bn buyback (total payout 331%); there has been none since. Cross-shareholdings: listed holdings cut from 77 names (FY2018) toward zero in FY2026; 7 of 10 sold outright in FY2025 (有報 p.71; JTEKT Report 2026 p.31). The proceeds and the European exit free capacity for a buyback. A buyback has not been announced, so it is not in the base case.
  • Hard gates: pass. No restatement or audit issue, no going-concern note (Q1 短信 p.13 (printed 11)), current ratio 1.58, OCF positive every year, progress read against the seasonal baseline, and no theme claim relied on.
Returns on capitalROE and ROA, %
−5%0%5%10%15%8% cost of equity2017/03 ROE: 10%2018/03 ROE: 9.7%2020/03 ROE: −0.7%2021/03 ROE: 0.1%2022/03 ROE: 3.5%2023/03 ROE: 5.3%2024/03 ROE: 5.5%2025/03 ROE: 1.8%2026/03 ROE: 1.6%1.6%2017/03 ROA: 4.3%2018/03 ROA: 4.2%2020/03 ROA: −0.3%2021/03 ROA: 0.1%2022/03 ROA: 1.5%2023/03 ROA: 2.4%2024/03 ROA: 2.6%2025/03 ROA: 0.9%2026/03 ROA: 0.8%0.8%2017/032018/032019/032020/032021/032022/032023/032024/032025/032026/03ROEROA

factsheet.json annual. The 8% line is a common Japan cost-of-equity assumption, not a company figure.

Cash generationOperating and free cash flow, ¥
−¥50bn¥0¥50bn¥100bn¥150bn¥200bn2019/03 Operating cash flow: ¥104bn2020/03 Operating cash flow: ¥62.3bn2021/03 Operating cash flow: ¥91.8bn2022/03 Operating cash flow: ¥67bn2023/03 Operating cash flow: ¥78.3bn2024/03 Operating cash flow: ¥154bn¥154bn2025/03 Operating cash flow: ¥80.2bn2026/03 Operating cash flow: ¥108bn¥108bn2019/03 Free cash flow: ¥28.9bn2020/03 Free cash flow: −¥29.5bn2021/03 Free cash flow: ¥39.2bn2022/03 Free cash flow: ¥41.8bn2023/03 Free cash flow: ¥26.2bn2024/03 Free cash flow: ¥83.1bn2025/03 Free cash flow: ¥4.3bn2026/03 Free cash flow: ¥55.8bn2019/032020/032021/032022/032023/032024/032025/032026/03Operating cash flowFree cash flow
Data
YearOCFICFFCFOCF / NP
2019/03¥104bn−¥75.2bn¥28.9bn3.82
2020/03¥62.3bn−¥91.8bn−¥29.5bn-16.42
2021/03¥91.8bn−¥52.5bn¥39.2bn114.7
2022/03¥67bn−¥25.3bn¥41.8bn3.24
2023/03¥78.3bn−¥52.1bn¥26.2bn2.28
2024/03¥154bn−¥71.4bn¥83.1bn3.84
2025/03¥80.2bn−¥75.9bn¥4.3bn5.85
2026/03¥108bn−¥52.7bn¥55.8bn9.06

factsheet.json annual. FCF here is OCF plus investing cash flow.

Net debtInterest-bearing debt less cash, ¥. Below zero is net cash.
¥0¥50bn¥100bn¥150bn¥200bn2019/03 Net debt: ¥139bn2020/03 Net debt: ¥195bn¥195bn2021/03 Net debt: ¥172bn2022/03 Net debt: ¥143bn2023/03 Net debt: ¥138bn2024/03 Net debt: ¥83.8bn2025/03 Net debt: ¥131bn2026/03 Net debt: ¥90.5bn¥90.5bn2019/032020/032021/032022/032023/032024/032025/032026/03
Data
YearCashDebtNet debtEquity ratioCurrent ratio
2019/03¥136bn¥274bn¥139bn42%1.62
2020/03¥138bn¥333bn¥195bn40%1.67
2021/03¥122bn¥293bn¥172bn43%1.63
2022/03¥128bn¥270bn¥143bn45%1.58
2023/03¥127bn¥265bn¥138bn46%1.72
2024/03¥170bn¥253bn¥83.8bn48%1.67
2025/03¥120bn¥251bn¥131bn48%1.58
2026/03¥138bn¥229bn¥90.5bn50%1.58

factsheet.json balance

Dividend per share¥ per share, not split-adjusted. 5 consecutive increases.
¥0¥20¥40¥60¥802018/03 DPS: ¥432019/03 DPS: ¥442020/03 DPS: ¥382021/03 DPS: ¥162022/03 DPS: ¥182023/03 DPS: ¥302024/03 DPS: ¥362025/03 DPS: ¥502026/03 DPS: ¥602027/03E DPS: ¥70¥702018/032019/032020/032021/032022/032023/032024/032025/032026/032027/03E

factsheet.json returns.dps (zaimu_dps_table)

IR and management credibility

  • 2024-04: second mid-term plan with ROE, PBR and margin targets, and a 2030 Vision of ROE 10% and PBR 1.5x (JTEKT Report 2026 p.5).
  • 2025-08-01: European needle-roller bearing business sold (有報 p.99).
  • 2026-02-27: basic agreement to sell the European auto business; 2026-03-19: OP guide cut and charges booked; 2026-05-27: definitive agreement; 2026-07-31: completion, one month early (snapshot pages/report_disclose.html).
  • 2026-07: outside-director dialogue on capital cost published in the integrated report. Directors are asked why the cost of capital is not disclosed (JTEKT Report 2026 p.59).

The company does what it says on restructuring, and early. It does not deliver on profit guidance: the initial FY2026/03 OP guide was missed by half, and this year's mid-term targets will probably be missed. The president writes that he "feels strong responsibility" for ROE and PBR (JTEKT Report 2026 p.5).

Valuation and scenarios

CaseNext-year OP or EPSMultipleValue per shareReturn from today
BullFY28/03 EPS ¥215 (consensus NP ¥68.6bn)12.3x (+2σ PER)¥2,645+24%
BaseFY28/03 EPS ¥190 (FY27 ex one-offs, flat)11.0x (band mean)¥2,090−2%
BearFY28/03 EPS ¥140 (yen to ¥145, tariffs, repeat charges)10.0x (−1σ PER)¥1,400−35%

Add about 3.3% for the dividend in each case. The bear is close to 0.55x the Q1 BPS of ¥2,542, about the FY2025 low of ¥1,407.

  • PER on 1y-forward consensus is 11.07x against a band mean of 10.88x (z +0.26). PBR is 0.84x against a mean of 0.83x (z +0.50). Both bands are narrow (PBR ±1σ 0.81–0.85x). EV/EBITDA is 5.3x forecast (fact sheet, Valuation).
  • Peers (Yahoo! Finance Japan, 2026-10-16, company-forecast PER and actual PBR): NSK 17.6x / 0.74x, NTN 14.7x / 0.74x, Aisin 10.5x / 0.73x, JTEKT 13.6x / 0.84x. JTEKT already trades at a PBR premium to its bearing and auto-parts peers.
  • What the price implies: at band-mean PER, ¥2,138 needs EPS of about ¥196, which is roughly the ex-one-off FY2027/03 number. The market already capitalises a clean year. Upside needs FY2028/03 consensus (OP ¥107.7bn) to prove real, or a PBR rerating toward 1x on a buyback.
  • Why the market might be right: auto-part margins have stayed at 3–4% for a decade, China is falling, and the yen tailwind can reverse.
Price mapToday's price against the report's scenario values, the consensus target, the 52-week range and moving averages
52-week range ¥1,407 to ¥2,26552w low ¥1,40752w high ¥2,265Bear ¥1,400 −35%Bear ¥1,400 −35%MA200 ¥1,966MA200Base ¥2,090 −2%Base ¥2,090 −2%MA25 ¥2,100MA25MA75 ¥2,102MA75Today ¥2,138Today ¥2,138Bull ¥2,645 +24%Bull ¥2,645 +24%Consensus target ¥2,748Consensus target ¥2,748

Scenario values from the report's scenario table. Prices and consensus target from factsheet.json. A consensus target is an external estimate, not fair value.

Valuation against its own historyCurrent multiple within the stock's one-year mean ±1σ and ±2σ band
Forward PER−2σ9.4x−1σ10.2xmean10.9x+1σ11.6x+2σ12.3xForward PER 11.1x, z 0.2611.1x (z +0.26)PBR−2σ0.79x−1σ0.81xmean0.83x+1σ0.85x+2σ0.88xPBR 0.84x, z 0.50.84x (z +0.50)

factsheet.json valuation (stock_chart_per, stock_chart_pbr)

Bull case

  • Q2 shows business profit at ¥45bn or more for H1 and a raise of the ¥90bn guide, with no further charges.
  • Freed capital from the European exit and cross-shareholding sales goes into a buyback of ¥20–30bn, as in February 2025.
  • Steer-by-wire (Toyota supplier award, JTEKT Report 2026 p.10) and machine-tool demand at JIMTOF 2026 (from 2026-10-26) support FY2028/03 consensus OP of ¥107.7bn.

Bear case

  • The yen strengthens from about ¥158 toward ¥145; yen weakness was the first named driver in every segment in Q1.
  • US tariffs widen: bearings profit fell 11% in Q1 on tariffs alone.
  • Restructuring charges recur. Two years in a row have each brought a new European charge (¥10.4bn in FY2025, ¥18.9bn in FY2026), and North America had its own productivity-driven cost problem, which management says a task force is now fixing (有報 p.11).
  • Consensus FY2028/03 OP has already been cut 3.5% in three months.

Catalysts

DateEventWhy it matters
2026-10-26JIMTOF 2026 opens; G5 grinder launchMachine-tool order tone
2026-10-29Q2 FY2027/03 resultsEuropean loss size, H1 business profit vs ¥45bn, any guide raise or buyback
2027-01-29 (est.)Q3 resultsLast chance to raise the FY guide; FX at year-end rates
2027-04 (est.)FY results and third mid-term planNew ROE and capital-return targets after this plan's likely miss

What would change the rating

  • Upgrade to Buy if Q2 business profit is ¥45bn or more for H1, other expenses come in below ¥5bn year to date, and the company raises the guide or announces a buyback, with the price still below ¥2,300.
  • Downgrade to Sell if H1 business profit is below ¥40bn, a new restructuring charge appears, or FY2027/03 consensus OP falls below ¥75bn.
  • Thesis invalidated if the business-profit margin goes back below 4% for two quarters after the European exit.

Monitoring

IndicatorCurrentTriggerSourceNext update
Business-profit progress vs ¥90bn25.3% at Q1 (18.6% last year)H1 below 45%短信2026-10-29
OP progress vs seasonal median30.4% vs 28.0% (+2.4 pts)below −8 ptsFact sheet2026-10-29
Consensus FY27 OP direction¥83.8bn, +1.0% 3mbelow ¥75bnIFISWeekly
Other expenses YTD+¥0.1bn net at Q1above ¥15bn for the year短信 segment note2026-10-29
USD/JPY vs ¥155 planabout ¥158below ¥145BOJDaily
Buyback or cross-shareholding saleNone since 2025-02AnnouncementTDnetWith results

Scorecard

FactorScoreComment
Business quality8 / 15Global EPS leader, but 3–4% auto margins and 43% Toyota dependence
Earnings momentum15 / 20Business profit +62% in Q1, margin 4.6%; FX-driven
Financial strength12 / 15Net D/E 11%, OCF 9x NP, current ratio 1.58
Capital efficiency and allocation4 / 10ROE 1.6% → 6.2% guide, below 7–8% target and cost of equity; no buyback since 2025
Sentiment and revisions8 / 15Brokers bullish, targets ¥2,300–3,080, but consensus already above guide and FY28 estimate falling
Valuation10 / 20At band mean on PER and PBR; PBR premium to peers
Technical and event confirmation3 / 5+47.8% 1y, above MA200, near the high; results in 12 days
Total60 / 100Hold band; matches the rating.
ScorecardScore as % of each factor's weight
0%25%50%75%100%Business qualityBusiness quality: 53%8 / 15Earnings momentumEarnings momentum: 75%15 / 20Financial strengthFinancial strength: 80%12 / 15Capital efficiency and allocationCapital efficiency and allocation: 40%4 / 10Sentiment and revisionsSentiment and revisions: 53%8 / 15ValuationValuation: 50%10 / 20Technical and event confirmationTechnical and event confirmation: 60%3 / 5

The report's scorecard table

Fact-sheet flags

Computed by factsheet.mjs. Each flag is a prompt to investigate, not a conclusion.

  • amberpayout-over-earnings Total payout 159.5% of net profit in 2026/03 (dividends 19,102, buybacks n/a)
  • ambernon-operating-in-actual 2026/03 actual pretax profit (税引前利益) 27,377 exceeds OP 24,847 by 10.2% of OP: RP, NP, EPS, ROE and forecast PER include non-operating items; check the 短信 for one-offs
  • infoconsensus-above-guidance 2027/03 consensus OP 83,828 is +11.8% vs company guidance

Sources and limitations

  • filings/2026-03_FY_短信_20260428.pdf (2026-04-28) p.1–5, p.8, p.13–17.
  • filings/2026-03_FY_有報_20260619.pdf (2026-06-19) p.9, p.37, p.41, p.71, p.99, p.127.
  • Snapshot pages/report_disclose.html: European auto sale completed and Q1 results (2026-07-31); definitive agreement (2026-05-27); revision (2026-03-19).
  • filings/2027-03_Q1_短信_20260731.pdf (2026-07-31) p.1, p.4–5, p.12–14.
  • JTEKT release, European automotive business transfer completed (2026-07-31): https://www.jtekt.co.jp/e/news/2026/005531.html
  • filings/2026-03_FY_統合_20260930.pdf, JTEKT Report 2026 (2026-09-30) p.5–6, p.10, p.31, p.59.
  • Snapshot pages/report_topix.html: broker ratings 2026-08-17 (¥3,080), 2026-08-31 (¥2,700, ¥2,760), 2026-10-07 (neutral, ¥2,300).
  • IFIS snapshot data/6473/2026-10-17/ and fact sheet data/6473/analysis/2026-10-17/factsheet.md.
  • Peers: Yahoo! Finance Japan, 2026-10-16 (https://finance.yahoo.co.jp/quote/6471.T, 6472.T, 7259.T). Peer ROE is derived (PBR ÷ PER), not from filings.
  • Large-holding data for Toyota (24.24%) from edinetdb.jp (secondary); next results date 2026-10-29 from the company and a web search.
  • Limitations: the Q1 presentation (説明会) is not in the snapshot, so FX sensitivity and the split of the ¥15bn other expenses are unknown. The ¥5bn European loss figure is from an AI-written news summary (FilingReader), not a filing. USD/JPY is from a Matsui Securities BOJ table whose year is not printed. TDnet and Kabutan were not fetched directly.
  • This is research, not individualised investment advice.