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Bridgestone (TSE:5108) has attracted attention after a mixed run in its share price, with a small gain over the past 3 months alongside a modest monthly decline and a stronger 1 year total return.
See our latest analysis for Bridgestone.
At a share price of ¥3,490.0, Bridgestone’s modest short term share price moves contrast with its stronger 1 year total shareholder return of 33.15%, which suggests that momentum has been built up over a longer period rather than in recent weeks.
If Bridgestone has you thinking about opportunities in autos more broadly, it could be a good time to see what else is on the move among auto manufacturers.
With Bridgestone trading at ¥3,490 and an estimated intrinsic value gap plus a discount to analyst targets, the key question is whether the stock still offers value or if the market is already pricing in future growth.
At ¥3,490, the most followed narrative around Bridgestone puts fair value at ¥3,911, which implies some remaining upside according to that framework.
The company is enhancing its sales mix with a focus on premium tires and specialty tire solutions in areas like ultra large mining and aircraft tires. This shift toward high value products is expected to drive revenue growth and margin expansion due to their higher profit margins.
Want to understand why a mature tire maker is being priced for stronger earnings and fatter margins, even with modest revenue growth baked in? The narrative leans heavily on improving profitability, a richer product mix, and a future profit multiple that is not stretched versus its own history. Curious which specific earnings, margin and valuation assumptions have been stitched together to reach that ¥3,911 figure?
Result: Fair Value of ¥3,911 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, the story hinges on Bridgestone managing weaker truck and bus tire demand in North America and pressure in Brazil, which could keep margins under strain.
Find out about the key risks to this Bridgestone narrative.
While the SWS model points to value upside, the current P/E of 17.6x sits above both the JP Auto Components average of 10.6x and the SWS fair ratio of 16.5x. That richer multiple can limit room for error. Which signal do you trust when sentiment cools?
See what the numbers say about this price — find out in our valuation breakdown.
If you look at the numbers and reach a different conclusion, or simply prefer to test your own assumptions, you can build a custom Bridgestone view in just a few minutes with Do it your way.
A great starting point for your Bridgestone research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
If Bridgestone has sharpened your focus, do not stop here. The Screener can surface other opportunities that fit your style before the market catches on.
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 5108.T.
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