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Denso Corp 6902

Morningstar Rating
¥‎2,514.00 −72.00 (2.78%)
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Company Report

Expect Strong Hybrid Vehicle Demand to Be a Tailwind for Denso in 2024

As one of the largest global automotive component suppliers, Denso has a diverse product portfolio that ranges from traditional powertrain/thermal components for internal combustion engine vehicles to relatively newer technologies such as electrification and advanced safety/sensing components. To adapt to a “once in a hundred years” transformation in the automotive industry, the company has been spending high amounts on research and development in recent years. In Japan, Denso has been engaging in various projects with its main original equipment manufacturer customer, Toyota Motor, as well as other components supplier companies in the Toyota Group, to jointly develop various technologies, including semiconductors, electrification, and advanced driver-assistance systems. We expect these initiatives will prevent commoditization of its key technologies, thus allowing the company to maintain its narrow moat.

Price vs Fair Value

6902 is trading at a 387% premium.
Price
¥‎2,514.00
Fair Value
¥‎2,376.00
Uncertainty
High
1-Star Price
¥‎3,546.00
5-Star Price
¥‎1,312.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Rapid adoption of electric vehicles will lead to sales of newer value-added components, like ECUs and heat pump systems, drastically improving margins.

Bears

Having a majority of sales from Toyota Group companies can give pricing leverage to the OEM customers, lowering Denso’s profitability.

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News

Trading Information

Previous Close Price
¥‎2,586.00
Day Range
¥‎2,495.002,549.50
52-Week Range
¥‎2,075.502,993.50
Bid/Ask
¥‎2,513.50 / ¥‎2,517.50
Market Cap
¥‎7.32 Tril
Volume/Avg
5.0 Mil / 6.4 Mil

Key Statistics

Price/Earnings (Normalized)
24.75
Price/Sales
1.05
Dividend Yield (Trailing)
2.19%
Dividend Yield (Forward)
2.19%
Total Yield
4.92%

Company Profile

Denso manufactures and sells mainly automotive components and systems. The company was founded in 1949 as a result of becoming independent from Toyota Motor, which is currently the largest shareholder. Its main businesses are powertrain control systems, thermal systems, electrification systems, mobility electronics, and sensors/semiconductor systems. The company operates globally and is headquartered in Kariya, Japan.
Sector
Consumer Cyclical
Industry
Auto Parts
Stock Style Box
Large Growth
Total Number of Employees
193,149

Competitors

Valuation

Metric
6902
MGA
CON
Price/Earnings (Normalized)
24.758.5312.65
Price/Book Value
1.321.140.84
Price/Sales
1.050.300.28
Price/Cash Flow
10.794.454.18
Price/Earnings
6902
MGA
CON

Financial Strength

Metric
6902
MGA
CON
Quick Ratio
0.980.730.72
Current Ratio
1.791.091.24
Interest Coverage
17.075.683.37
Quick Ratio
6902
MGA
CON

Profitability

Metric
6902
MGA
CON
Return on Assets (Normalized)
4.30%4.85%2.21%
Return on Equity (Normalized)
7.17%13.50%6.12%
Return on Invested Capital (Normalized)
5.11%8.85%4.79%
Return on Assets
6902
MGA
CON
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