Industrials · Specialty Industrial Machinery · TSE · Japan
¥2450.00-0.06%
Market cap ¥2.60TNext earnings 2026-11-04Updated Oct 24, 2026 · valuation updating
Our verdict
No fair value
We are missing the financial data our models need for this company. It will appear once the data arrives.
Not valued: there are no financial statements on file yet.
ACCE opinionIHI Corporation (7013.T)
Fair value
Not available
ACCE price target
¥2437
Rating
Not rated
Horizon
12 months
ACCE price target published on 22 Oct 2026, 16:00 CEST.
Price used: ¥2450 at the close on 23 Oct 2026, 08:30 CEST.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
ACCE score
59
out of 100
P/E
16.1x
forward 4.2x
1-year return
-22.3%
Dividend yield
0.94%
IHI Corporation in four questions
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Overview
ACCE thesis
IHI Corporation builds and services heavy engineering equipment in Japan, including marine and offshore structures, power generation and environmental plant, and aero-engine components, with a large defence and shipbuilding exposure. The moat is the installed base and the engineering know-how behind it: long-cycle projects, government and utility customers, and service contracts that keep earning after the original build. Revenue grew 10.9% and operating margin reached 19.5%, with ROE at 33.4%, so the business is converting that franchise into unusually strong returns on capital. The trailing P/E of 16.5 sits well above the forward P/E of 4.2, a gap that implies earnings are expected to rise sharply, so the first question for the PM is whether that step-up in profit is visible in the order book and project pipeline. That is the place to look before deciding whether the name deserves a deeper look.
⚠ Investor warnings · 3 flagsAI-assisted·How I use AI
high
Negative free cash flow
Free cash flow is $-479,624,992 despite a 19.5% operating margin, so reported earnings are not converting to cash. Earnings growth of 361.1% makes this gap harder to trust.
moderate
Sharp sequential revenue drop
Revenue fell 27.1% quarter over quarter, against 10.9% year-over-year growth. Read the trend with caution until the next quarter confirms whether the dip is seasonal or structural.
moderate
Price sits at ACCE target
The stock trades 0.5% above the ACCE price target of ¥2437.00 at JPY 2451.50, so there is little valuation cushion left against that estimate.
AI research notes
AI-assisted·How I use AIWritten Oct 22, 2026 · figures from 2026-10-22 · prices to Oct 23, 2026
Why it could do well
Earnings per share beat analyst expectations by 29.3% in the latest quarter, with EPS of 50.48 against 39.05 expected.
Return on equity of 33.4% shows the business earns strong returns on the capital shareholders have put in.
Analysts' mean price target of JPY 3519.09 sits 43.5% above the current share price, suggesting room for upside in their view.
Why it could disappoint
Free cash flow over the last twelve months was negative at -JPY 480M, so reported profits are not turning into cash.
The forward P/E of 4.2x looks implausibly low, and the earnings jump behind it is unlikely to repeat, so it cannot be relied on.
Revenue grew only 10.9% last year, well below the 45.3% yearly average of the past five years, so momentum has clearly slowed.
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