Fact based stock research
Mitsubishi Heavy (TSE:7011)

JP3900000005

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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.

Mitsubishi Heavy stock research in summary

mhi.com

ANALYSIS: With an Obermatt Combined Rank of 38 (worse than 62% compared with investment alternatives), Mitsubishi Heavy (Industrial Machinery, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Mitsubishi Heavy are low in value (priced high) with a consolidated Value Rank of 17 (worse than 83% of alternatives), and are riskily financed (Safety Rank of 30, which means above-average debt burdens) but show above-average growth (Growth Rank of 83). ...read more

RECOMMENDATION: A Combined Rank of 38, is a hold recommendation based on Mitsubishi Heavy's financial characteristics. As the company Mitsubishi Heavy shows low value with an Obermatt Value Rank of 17 (83% 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 83% of comparable companies (Obermatt Growth Rank is 83). 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 30 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 Mitsubishi Heavy, 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	17
Growth Rank	83
Safety Rank	30
Combined Rank	38

Country	Japan
Industry	Industrial Machinery
Index	TOPIX 100, Water Tech, Nikkei 225
Size class	XX-Large

This stock has achievements: Top 10 Stock.

14-Nov-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: Mitsubishi Heavy

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	100	95	65	17
GROWTH
GROWTH	33	35	81	83
SAFETY
SAFETY	23	12	24	30
SENTIMENT
SENTIMENT	n/a	41	47	^new
360° VIEW
360° VIEW	n/a	39	65	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Mitsubishi Heavy is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	100	95	65	17
GROWTH
GROWTH	33	35	81	83
SAFETY
SAFETY	23	12	24	30
COMBINED
COMBINED	60	45	66	38

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Mitsubishi Heavy the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 17 (worse than 83% compared with alternatives), Mitsubishi Heavy shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Mitsubishi Heavy. Price-to-Sales is 40 which means that the stock price compared with what market professionals expect for future profits is higher than 60% of comparable companies, indicating a low value concerning Mitsubishi Heavy's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 19, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Mitsubishi Heavy. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 14 and Dividend Yield, which is lower than 77% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 17, is a sell recommendation based on Mitsubishi Heavy's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Mitsubishi Heavy? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Mitsubishi Heavy? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Mitsubishi Heavy may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. 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)	100	95	78	40
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	98	88	77	14
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	98	95	47	19
DIVIDEND YIELD
DIVIDEND YIELD	86	66	55	23
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	100	95	65	17

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Mitsubishi Heavy; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 83 (better than 83% compared with alternatives) for 2024, Mitsubishi Heavy shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Mitsubishi Heavy. Sales Growth has a rank of 60 which means that currently, professionals expect the company to grow more than 60% of its competitors. Both Profit Growth, with a rank of 63, and Stock Returns, with a rank of 99, are also above average. But Capital Growth only has a rank of 46, which means that, currently, professionals expect the company to grow its invested capital less than 54% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 83, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. 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. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	11	6	29	60
PROFIT GROWTH
PROFIT GROWTH	43	81	78	63
CAPITAL GROWTH
CAPITAL GROWTH	n/a	51	64	46
STOCK RETURNS
STOCK RETURNS	68	55	85	99
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	33	35	81	83

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Mitsubishi Heavy.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 30 (better than 30% compared with alternatives), the company Mitsubishi Heavy has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Mitsubishi Heavy 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 Mitsubishi Heavy. Liquidity is at 46, meaning that the company generates less profit to service its debt than 54% 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 28, meaning the company has an above-average debt-to-equity ratio. It has more debt than 72% 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 30 (worse than 70% compared with alternatives), Mitsubishi Heavy has a financing structure that is 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 Mitsubishi Heavy because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	1	14	26	28
REFINANCING
REFINANCING	98	27	35	21
LIQUIDITY
LIQUIDITY	16	26	29	46
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	23	12	24	30

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Mitsubishi Heavy 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	16	84	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	38	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	92	45	^new
MARKET PULSE
MARKET PULSE	n/a	28	26	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	41	47	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Mitsubishi Heavy.
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