Fact based stock research
Itochu (TSE:8001)

JP3143600009

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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.

Itochu stock research in summary

itochu.co.jpja

ANALYSIS: With an Obermatt Combined Rank of 9 (worse than 91% compared with investment alternatives), Itochu (Trading & Distribution, Japan) shares have lower financial characteristics compared with similar stocks. Shares of Itochu are low in value (priced high) with a consolidated Value Rank of 21 (worse than 79% of alternatives), and are riskily financed (Safety Rank of 21, which means above-average debt burdens) but show above-average growth (Growth Rank of 55). ...read more

RECOMMENDATION: A Combined Rank of 9, is a sell recommendation based on Itochu's financial characteristics. As the company Itochu shows low value with an Obermatt Value Rank of 21 (79% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 55% of comparable companies (Obermatt Growth Rank is 55). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 21 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Itochu, even a low-value company (in terms of its key financial indicators) can be a good investment. 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	21
Growth Rank	55
Safety Rank	21
Combined Rank	9

Country	Japan
Industry	Trading & Distribution
Index	TOPIX 100, Nikkei 225
Size class	XX-Large

This stock has achievements: Top 10 Stock.

23-Jan-2025. 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: Itochu

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	92	50	29	21
GROWTH
GROWTH	41	45	33	55
SAFETY
SAFETY	19	22	21	21
SENTIMENT
SENTIMENT	n/a	6	61	^new
360° VIEW
360° VIEW	n/a	4	11	^new

Most recent update of the stock research: 23-Jan-2025. 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 Itochu is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	92	50	29	21
GROWTH
GROWTH	41	45	33	55
SAFETY
SAFETY	19	22	21	21
COMBINED
COMBINED	42	16	7	9

Last update of combined financial performance: 23-Jan-2025. Stock analysis on combined financial performance: The higher the rank of Itochu the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 21 (worse than 79% compared with alternatives), Itochu shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Itochu. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 58, which means that the stock price compared with what market professionals expect for future profits is lower than for 58% of comparable companies, indicating a good value concerning Itochu's profit levels. But Price-to-Sales is 37 which means that the stock price compared with what market professionals expect for future profits is higher than for 63% of comparable companies, indicating a low value concerning Itochu'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 30 and for dividend yield, which is lower than for 52% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 21, is a sell recommendation based on Itochu's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Itochu is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. 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 essential 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)	62	53	47	37
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	92	83	62	58
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	60	40	26	30
DIVIDEND YIELD
DIVIDEND YIELD	84	68	52	48
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	92	50	29	21

Last update of Value Rank: 23-Jan-2025. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Itochu; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), Itochu shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Itochu. Profit Growth has a rank of 55, which means that currently professionals expect the company to grow its profits more than 55% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 72 (above 72% of alternative investments). But Sales Growth has a below the median rank of 37, which means that, currently, professionals expect the company to grow less than 63% of its competitors, and Capital Growth also has a lower rank of 32. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Itochu. 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 mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	35	12	31	37
PROFIT GROWTH
PROFIT GROWTH	14	59	48	55
CAPITAL GROWTH
CAPITAL GROWTH	n/a	71	7	32
STOCK RETURNS
STOCK RETURNS	46	63	75	72
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	41	45	33	55

Last update of Growth Rank: 23-Jan-2025. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Itochu.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 21 (better than 21% compared with alternatives), the company Itochu has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Itochu is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Itochu. Liquidity is at 40, meaning that the company generates less profit to service its debt than 60% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 30, meaning the company has an above-average debt-to-equity ratio. It has more debt than 70% of its competitors. Finally, Refinancing is at a rank of 21 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 79% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 21 (worse than 79% compared with alternatives), Itochu has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Itochu because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	14	23	32	30
REFINANCING
REFINANCING	62	21	21	21
LIQUIDITY
LIQUIDITY	24	50	44	40
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	19	22	21	21

Last update of Safety Rank: 23-Jan-2025. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Itochu 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	30	46	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	78	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	35	75	^new
MARKET PULSE
MARKET PULSE	n/a	34	19	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	6	61	^new

Last update of Sentiment Rank: 23-Jan-2025. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Itochu.
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