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If you are wondering whether Hitachi’s current share price fairly reflects the business, this article walks through what the numbers are saying about its value.
Hitachi’s share price recently closed at ¥5,204, with returns of 1.3% over 7 days, 4.9% over 30 days, 2.7% year to date, 42.4% over 1 year, around 4x over 3 years and a very large gain over 5 years.
Recent coverage around Hitachi has focused on its position as a major capital goods player and ongoing interest from investors tracking large Japanese industrials, which has kept attention on the share price. This backdrop helps frame the recent returns and raises the question of how much of the story is already reflected in the current valuation.
On our checks, Hitachi scores 1 out of 6 on undervaluation tests, giving it a valuation score of 1/6. Next we will compare different valuation methods to see what they imply and then finish with a way to look at value that can help you go beyond any single metric.
Hitachi scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow model takes estimates of the cash a company may generate in the future and discounts those figures back to today to arrive at an estimate of what the business could be worth now.
For Hitachi, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month free cash flow is ¥1.20b. Analyst and extrapolated projections suggest free cash flow of ¥631,110.29m in 2026 and ¥811,403.91m in 2035, with Simply Wall St extending forecasts beyond the years covered by analyst estimates.
When these projected cash flows are discounted, the result is an estimated intrinsic value of ¥3,591.03 per share. Compared with the recent share price of ¥5,204, the DCF output indicates the stock is around 44.9% above this modelled value. This suggests Hitachi is trading at a premium on this measure.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Hitachi may be overvalued by 44.9%. Discover 863 undervalued stocks or create your own screener to find better value opportunities.
6501 Discounted Cash Flow as at Jan 2026
For profitable companies, the P/E ratio is a straightforward way to link what you pay for a share to the earnings that each share generates. It lets you compare businesses of different sizes on a like for like basis.
Story Continues
What counts as a “normal” P/E depends on what investors expect for future growth and how much risk they see in those earnings. Higher expected growth and lower perceived risk usually support a higher P/E, while lower growth or higher risk tend to mean a lower P/E.
Hitachi is currently trading on a P/E of 29.52x. That sits above the Industrials sector average of 12.98x and also above the peer group average of 13.32x. To add more context, Simply Wall St calculates a proprietary “Fair Ratio” for Hitachi of 36.10x, which reflects factors such as earnings growth, industry, profit margins, market cap and risk profile.
This Fair Ratio aims to be more tailored than a simple comparison with peers or the sector, because it adjusts for company specific traits rather than assuming all firms should trade on the same multiple. Compared with this Fair Ratio, Hitachi’s current P/E of 29.52x is lower, which points to the shares being undervalued on this measure.
Result: UNDERVALUED
TSE:6501 P/E Ratio as at Jan 2026
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1445 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St’s Community page let you turn your view of Hitachi into a clear story that links its business drivers to a forecast for revenue, earnings and margins, then to a Fair Value you can compare with the current price. All of this is updated as new news or earnings arrive. One investor might back a higher fair value around ¥5,300 if they think government backed energy and AI infrastructure and digital services can support stronger margins, while another might anchor closer to ¥3,900 if they are more cautious about competition, costs and underperforming segments.
Do you think there’s more to the story for Hitachi? Head over to our Community to see what others are saying!
TSE:6501 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary 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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include 6501.T.
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