Should IHI’s (TSE:7013) Dividend Hike and Upbeat Guidance Prompt Investor Action?

• On November 6, 2025, IHI Corporation announced that its second quarter cash dividend will increase to ¥70.00 per share, up from ¥50.00 a year earlier, and also revised its consolidated earnings guidance for the fiscal year ending March 31, 2026, projecting revenue of ¥1.64 trillion and profit attributable to owners of ¥125 billion.
• This double update reflects both a direct reward to shareholders and management's confidence in the company's improving financial outlook.
• We'll now explore how IHI's raised dividend signals potential changes in its investment narrative and future financial performance.

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IHI Investment Narrative Recap

For investors considering IHI, the key is to believe in the continued growth and profitability of its civil aero engines and engineering businesses, while being mindful of risks such as volatility in spare parts demand and potential cost overruns in Power Systems. The recent dividend increase and guidance revision highlight short-term management confidence but may not fully address the impact of FX fluctuations, which remain an important short-term catalyst and key risk given the company’s global exposure.

Among the recent announcements, IHI's 7-for-1 stock split, effective October 1, 2025, stands out as especially relevant. This move points to confidence in making the stock more accessible, but it does not alter the underlying fundamentals tied to the company’s reliance on currency trends and the sustainability of recent sales growth in key segments.

However, before getting too comfortable, investors should be aware of...

Read the full narrative on IHI (it's free!)

IHI's outlook anticipates ¥1,734.8 billion in revenue and ¥103.1 billion in earnings by 2028. This is based on an expected annual revenue growth rate of 2.6% and reflects a decrease in earnings of ¥15.1 billion from the current ¥118.2 billion.

Uncover how IHI's forecasts yield a ¥2626 fair value, a 18% downside to its current price.

Exploring Other Perspectives

Simply Wall St Community members provided two fair value estimates for IHI, ranging from ¥1,960 to ¥2,626 per share. With ongoing concerns about the longevity of civil aero engine spare parts sales, it’s worth exploring why opinions differ so much and what this could mean for future performance.

Explore 2 other fair value estimates on IHI - why the stock might be worth 38% less than the current price!

Build Your Own IHI Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your IHI research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free IHI research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate IHI's overall financial health at a glance.

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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.

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