[Earnings of the 5 Major Trading Companies] Marubeni’s stock price soars with upward revision, share buybacks, and increased dividends! Which company is lagging behind?

moomooニュース日本株 wrote a column · Feb 9 19:27

In the consolidated earnings for the third quarter (April to December 2025) of the five major trading companies,a decline in resource prices (such as coking coal and iron ore)and a reaction from large one-off profits the previous year resulted inthree major firms reporting reduced profits,highlighting a challenging external environment.

[Earnings of the 5 Major Trading Companies] Marubeni’s stock price soars with upward revision, share buybacks, and increased dividends! Which company is lagging...

On the other hand,ITOCHU Corporation and Marubeni maintained profit growth thanks to strong performance in non-resource sectors,。 $Marubeni (8002.JP)$with Marubeni being the only company among the five to announceThe full-year forecast was revised upward, with an additional announcement of up to 15 billion yen in share buybacks and increased dividends..

Immediately after the earnings reports of five companies were released, the Liberal Democratic Party (LDP) achieved a historic victory in the House of Representatives election, and Japanese stocks surged significantly on the 9th. It is believed that foreign capital, optimistic about the stability of the Takemichi administration, flowed heavily into the market, which also lifted trading company stocks. On the charts, all five companiesshow a strong upward trend known as 'Perfect Order'(The short-, medium-, and long-term moving averages are aligned from top to bottom and trending upward)

● High progress rate $Mitsubishi (8058.JP)$announced upward revisions or share buybacks, $Marubeni (8002.JP)$and improvements in cash-generating capabilities were well received. $Mitsui (8031.JP)$Are continuously hitting new intraday highs since listing, showing robust price movements. $Sumitomo (8053.JP)$and has strength in non-resource sectors $ITOCHU (8001.JP)$is slightly lagging but each stock appears to be attempting to reach a new high. (Addendum: As of 1:00 PM on the 10th, Sumitomo and ITOCHU Corporation have also updated their all-time highs)
● Excluding ITOCHU Corporation, the current share prices (as of 1:00 PM on the 10th) of the four companies have exceeded the average analyst target price.
● The estimated PER (Price Earnings Ratio) for each company ranges from approximately 13 to 26 times, with Mitsubishi's stock price being the highest relative to earnings (26.7 times), followed by Marubeni, Mitsui, and ITOCHU Corporation. The lowest is Sumitomo at 13.6 times.
● Mitsubishi and Marubeni are showing increasing signs of overheating in their stock prices, while Sumitomo and ITOCHU’s overheating remains moderate.

■ Overview of Each Company's Q3 Earnings and Highlights

◆ITOCHU Corporation: Non-resource sectors lead the way, achieving highest profits in three years

・Net profit: 705.2 billion yen (up 4.3% year-on-year)
・Strong performance in non-resource businesses such as food, information, and finance absorbed the impact of low resource prices and a strong yen, achieving record profits for the April-December period.
・One-time gains from the sale related to the unwinding of cross-shareholdings with Thailand’s Charoen Pokphand Group contributed. Segments including FamilyMart also performed well.
・Progress rate towards the full-year forecast (900 billion yen) is solid at 78%. The company also announced an additional buyback of up to 20 billion yen, with the total payout ratio expected to rise to 52%.

◆Mitsui: Losses from JA Mitsui Leasing weigh heavy

・ Net Income:611.9 billion yen (compared to the same period last year)6.2% decrease）
・In addition to the decline in resource prices, recording related losses from JA Mitsui Lease, an equity-method affiliate, had a significant impact.
・Progress rate for the full-year net profit forecast stands at 75%.
・On the other hand, the outlook for the ability to generate cash (core operating cash flow) has been revised upward for the full year.

◆Mitsubishi: Significant profit decline due to the reaction from the previous year and lower resource prices

・Net Income: 607.9 billion yen (down 26.5%）
・The reaction from booking valuation gains related to Lawson and profits from coal mine sales last year hit hard.
・On the other hand, the ability to generate profits is improving. Copper operations are expanding due to rising prices.
・For next fiscal year (ending March 2027), profit contributions from investment projects such as the Canadian liquefied natural gas business are expected.
・Despite a tough performance in the metal resources business with a 56% drop due to falling coking coal and iron ore prices, the progress rate is high at 87%, and the full-year forecast (70 billion yen) remains unchanged.

◆Sumitomo: Non-resource sectors remain solid, but resource businesses are a drag

・Net Income: 408.4 billion yen (a year-on-year decrease of -1.9%)）
・Although non-resource areas such as real estate performed well, they were unable to offset the decline in coal prices and the poor performance of the steel pipe business in North America.
・For the full year, a record high of 570 billion yen is expected, with a progress rate of 72%.

◆Marubeni: The only upward revision, accelerating growth strategy

・Net Income: 432.2 billion yen (a year-on-year increase of 1.7%)）
・Contributions from improved copper market conditions and gains from the integration of real estate businesses led to an upward revision of the full-year forecast.Revised upward from 5.1 trillion yen to 5.4 trillion yen. Exceeded market expectations.
・Increased the dividend forecast to 107.5 yen and announced a share buyback. Set an ambitious goal of achieving a market capitalization of 10 trillion yen by March 2028.

■ Outlook

Although there is still uncertainty about the future of resource prices, this is a moment when the quality of each company's 'earning power' is being tested, including firms like Mitsubishi Corporation and ITOCHU Corporation with high profit progression rates, and companies like Marubeni, which are making progress in improving their business portfolios. In particular, trends in China’s economy are likely to be a major focal point that will influence the coal and iron ore markets next fiscal year. Under the headwinds of falling resource prices, whether companies can increase their 'real earnings' without relying on one-time profits will be a key factor in determining investor evaluation.

▼High Municipal Administration, Strategic Sector Related Stocks (For Reference)

―moomoo News Kei

Source: IR materials from respective companies, moomoo

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