- JFE’s net income for the first quarter was 7.13 billion yen, missing estimates significantly and showing a decline of 74% compared to the previous year.
- Net sales for the same period were 1.12 trillion yen, falling short of expectations and decreasing by 7.9% year-on-year.
- Steel revenue stood at 761.22 billion yen, slightly above estimates but still reflecting a 12% decrease from the previous year.
- Engineering revenue increased by 9.3% year-on-year, reaching 135.36 billion yen, surpassing market expectations.
- Trading revenue declined by 5.5% year-on-year to 338.74 billion yen, missing the expected target.
- Business profit for the first quarter dropped by 71% year-on-year, amounting to 16.26 billion yen.
- For the first half forecast, JFE expects net sales to reach 2.33 trillion yen and predicts a net income of 15.00 billion yen.
- JFE maintains its 2026 year forecast, with net income projected at 75.00 billion yen and net sales of 4.75 trillion yen, along with a dividend of 80.00 yen.
- Analyst ratings include 3 buys, 11 holds, and 0 sells.
JFE Holdings on Smartkarma
Analysts on Smartkarma, such as Rahul Jain, are providing insights into JFE Holdings. In a detailed report titled “JFE Holdings (5411 JP) – Stable Core, Strategic JSW Stake, and Deep-Value Opportunity,” Jain highlights the company’s trajectory. JFE Holdings is projected to reach peak earnings in FY22, with plans for investments in decarbonization and product enhancements to uphold competitiveness. Despite rebounding from COVID-related losses, the company is expected to experience gradual earnings normalization through FY25, with steady steel volumes but decreased margins due to subdued domestic demand. Jain notes that JFE Holdings is trading at a discount compared to its industry peers.
Moreover, JFE Holdings is actively investing approximately ¥970B (~$6.5B) by FY2030 in decarbonization efforts, product upgrades (e.g., electrical steel, galvanizing), and expanding its presence overseas to fortify its competitive position. Adjusting for its significant ¥910B (~¥1.7T) JSW stake, which represents about 30% of its enterprise value, JFE is currently trading at a remarkably low multiple of 2.7x EV/EBITDA compared to competitors like Nippon Steel and POSCO. This analysis indicates a deep-value opportunity for investors considering JFE Holdings within the steel industry.
A look at JFE Holdings Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 5 | |
| Dividend | 5 | |
| Growth | 2 | |
| Resilience | 2 | |
| Momentum | 2 | |
| OVERALL SMART SCORE | 3.2 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
With high scores in both Value and Dividend factors on the Smartkarma Smart Scores, JFE Holdings is positioned favorably for long-term growth. The company’s strong value proposition coupled with its commitment to dividends indicates stability and potential for returns for investors. However, JFE Holdings scored lower in Growth, Resilience, and Momentum factors, suggesting some challenges in those areas that may need attention.
JFE Holdings, Inc., a result of the merger between NKK Corp and Kawasaki Steel Corp, primarily focuses on steel production and integrated engineering services through its subsidiaries. While the company shows strength in value and dividends, its growth, resilience, and momentum aspects may require strategic adjustments to ensure sustained success in the long run.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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