Fact based stock research
Central Japan Railway (TSE:9022)

JP3566800003

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Central Japan Railway stock research in summary

company.jr-central.co.jp

ANALYSIS: With an Obermatt Combined Rank of 75 (better than 75% compared with investment alternatives), Central Japan Railway (Railroads, Japan) shares have much better financial characteristics than comparable stocks. Shares of Central Japan Railway are a good value (attractively priced) with a consolidated Value Rank of 65 (better than 65% of alternatives), are safely financed (Safety Rank of 75, which means low debt burdens), but show below-average growth (Growth Rank of 35). ...read more

RECOMMENDATION: A Combined Rank of 75, is a strong buy recommendation based on Central Japan Railway's financial characteristics. As the company Central Japan Railway's key financial metrics exhibit good value (Obermatt Value Rank of 65) but low growth (Obermatt Growth Rank of 35) while being safely financed (Obermatt Safety Rank of 75), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 65% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	65
Growth Rank	35
Safety Rank	75
Combined Rank	75

Country	Japan
Industry	Railroads
Index	TOPIX 100, Nikkei 225
Size class	X-Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Central Japan Railway

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	23	39	53	65
GROWTH
GROWTH	16	71	99	35
SAFETY
SAFETY	46	70	61	75
SENTIMENT
SENTIMENT	n/a	18	84	^new
360° VIEW
360° VIEW	n/a	47	92	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Central Japan Railway is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	23	39	53	65
GROWTH
GROWTH	16	71	99	35
SAFETY
SAFETY	46	70	61	75
COMBINED
COMBINED	13	76	87	75

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Central Japan Railway the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 65 (better than 65% compared with alternatives), Central Japan Railway shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Central Japan Railway. Price-to-Profit (also referred to as price-earnings, P/E) is 100 which means that the stock price compared with what market professionals expect for future profits is lower than for 100% of comparable companies, indicating a good value concerning Central Japan Railway's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 93, which means that the stock price is lower as regards to invested capital than for 93% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 75% of alternatives (only 25% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 92% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 65, is a buy recommendation based on Central Japan Railway's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	18	19	19	25
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	1	64	89	100
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	80	93	85	93
DIVIDEND YIELD
DIVIDEND YIELD	34	10	6	8
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	23	39	53	65

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Central Japan Railway; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% compared with alternatives), Central Japan Railway shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Central Japan Railway. Only Capital Growth has a good rank of 73, which means that currently professionals expect the company to grow its invested capital more than 37% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 44 which means that currently professionals expect the company to grow less than 56% of its competitors. Profit Growth with a rank of 37 and Stock Returns with a rank of 21 are also low (below 79% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Central Japan Railway is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	10	96	38	44
PROFIT GROWTH
PROFIT GROWTH	45	50	73	37
CAPITAL GROWTH
CAPITAL GROWTH	n/a	35	92	73
STOCK RETURNS
STOCK RETURNS	70	53	65	21
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	16	71	99	35

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Central Japan Railway.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 75 (better than 75% compared with alternatives) for 2024, the company Central Japan Railway has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Central Japan Railway is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Central Japan Railway. Refinancing is at 95, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 95% of its competitors. Liquidity is also good at 56, meaning the company generates more profit to service its debt than 56% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 32, which means the company has an above-average debt-to-equity ratio. It has more debt than 68% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 75 (better than 75% compared with alternatives), Central Japan Railway has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Central Japan Railway could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Central Japan Railway and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	18	46	30	32
REFINANCING
REFINANCING	96	100	89	95
LIQUIDITY
LIQUIDITY	26	32	34	56
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	46	70	61	75

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Central Japan Railway and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	35	58	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	39	93	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	52	93	^new
MARKET PULSE
MARKET PULSE	n/a	23	23	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	18	84	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Central Japan Railway.
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