Nippon Steel Corporation (5401.T) stock analysis

In our weekly check, Nippon Steel Corporation is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 10 pass, warnings: 5, red flags: 10.

About Nippon Steel Corporation

Nippon Steel Corporation is a Basic Materials company (Steel) based in Japan, listed on JPX as 5401.T.

What our checks show for 5401.T

Red flags

• Net debt is 5.6x a year of EBITDA (debt/equity 0.98). That limits room in a downturn and raises refinancing risk.
• Operating profit does not cover the interest bill (0x): interest is paid from cash or new debt.
• The net margin fell by 9.2 points over 5 years, to 0.2%: the company keeps less of each sale as profit.
• The gross margin fell by 3.6 points, to 14.4%: costs are rising faster than prices.
• The net margin is only 0.2%: little room if costs rise.
• Free cash flow is negative (-1.7% of revenue): the business spends more cash than it brings in.
• The dividend takes 133936% of profit: little cushion if profit falls.
• The stock has fallen as much as 92% from a peak. Would you have held through that?
• Return on capital (ROCE) is only 3.9%.
• Pay in shares equals 0% of free cash flow: it dilutes shareholders.

Warning signs

• Analysts expect only about 4.5% a year of growth in revenue.
• Earnings per share fell 72.1% a year over the last 3 years.
• Net profit fell 70.9% a year over the last 3 years.
• The stock is still below its previous peak.
• The share count grew by 13.5% in 2 years: each shareholder owns a smaller slice.

Strengths

• Operating cash flow is 41.78x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 181% a year over the next years.
• Analysts expect the net margin to improve by 3.4 points from today's 0.2%.
• The price is 11.9 times earnings (P/E), reasonable for its growth.
• A large company: market value $21.79 billion.
• Beta 0.63: the stock usually moves less than the market.

Next earnings report: 2026-11-05

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Questions

What grade does Nippon Steel Corporation (5401.T) have?

In our weekly check, Nippon Steel Corporation is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 10 pass, warnings: 5, red flags: 10. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of 5401.T stock?

This week's biggest flags for Nippon Steel Corporation: High debt, Weak interest cover, Margins falling. In total 15 of 25 checks show a warning or a red flag.

What does Nippon Steel Corporation do?

Nippon Steel Corporation is a Basic Materials company (Steel) based in Japan, listed on JPX as 5401.T.

When does Nippon Steel Corporation report earnings next?

The next earnings report is expected on 2026-11-05. We re-run the checks every week, so the grade can change after it.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-24

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