Stock Analysis & Valuation NTN Corporation (6472.T)

• Previous Close: ¥369.40
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, ¥	Upside, %
Artificial intelligence (AI)	391.78	6
Intrinsic value (DCF)	203.90	-45
Graham-Dodd Method	56.92	-85
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

NTN Corporation (6472.T) is a leading Japanese manufacturer of bearings, drive shafts, and precision equipment, serving diverse industries such as automotive, aerospace, renewable energy, and industrial machinery. Founded in 1918 and headquartered in Osaka, NTN operates globally, with significant markets in Japan, the Americas, Europe, and Asia. The company specializes in high-performance rolling bearings, constant velocity joints, and condition monitoring systems, catering to sectors like electric vehicles, wind turbines, and robotics. With a strong focus on innovation and aftermarket services, NTN plays a crucial role in industrial automation and sustainable energy solutions. Its broad product portfolio and technical expertise position it as a key player in the global industrial components market.

Investment Summary

NTN Corporation presents a mixed investment case. On the positive side, its diversified industrial exposure, particularly in growing sectors like electric vehicles and renewable energy, provides resilience. The company maintains a moderate beta (0.579), suggesting lower volatility compared to the broader market. However, challenges include high total debt (¥362 billion) relative to its market cap (~¥114.6 billion) and modest net income (¥10.6 billion). While operating cash flow (¥65.1 billion) is healthy, capital expenditures (¥24.7 billion) remain significant. The dividend yield (~1.9%) is modest, and the company faces stiff competition in the global bearings market. Investors should weigh its industrial diversification against margin pressures and leverage concerns.

Competitive Analysis

NTN Corporation competes in the highly technical and capital-intensive bearings and precision components industry. Its competitive advantage lies in its diversified product portfolio, spanning automotive, industrial, and renewable energy applications, which mitigates sector-specific downturns. The company’s long-standing expertise in high-performance bearings (e.g., for wind turbines and EVs) and its global aftermarket services network strengthen its positioning. However, NTN faces intense competition from larger rivals like NSK and SKF, which have greater scale and R&D budgets. While NTN’s focus on Japan and Asia provides regional strength, it lags behind some global peers in European and North American market penetration. Its ability to innovate in precision components (e.g., for robotics and aerospace) is a key differentiator, but pricing pressure from low-cost manufacturers remains a risk. The company’s debt load could also limit its agility in pursuing growth opportunities compared to financially stronger competitors.

Major Competitors

• NSK Ltd. (6471.T): NSK is a larger Japanese competitor with a broader global footprint and stronger R&D capabilities. It leads in automotive bearings and has a significant presence in industrial machinery. However, its heavy reliance on the automotive sector makes it more cyclical than NTN. NSK’s scale gives it cost advantages, but NTN competes effectively in niche precision applications.
• SKF AB (SKF-B.ST): SKF is the global leader in bearings, with superior brand recognition and a vast distribution network. Its European base gives it an edge in industrial markets, but it faces higher production costs than NTN. SKF’s focus on premium products contrasts with NTN’s broader mid-market positioning. NTN’s strength in Asia offsets SKF’s dominance in Europe.
• THK Co., Ltd. (THK.T): THK specializes in linear motion bearings and robotics components, overlapping with NTN’s precision equipment segment. THK has stronger robotics exposure, while NTN is more diversified in automotive and energy. THK’s technology leadership in linear systems poses a challenge, but NTN’s broader industrial base provides stability.
• Schaeffler AG (SCHN.VI): Schaeffler is a major automotive and industrial supplier with strong European OEM relationships. Its integrated manufacturing and R&D resources outpace NTN’s, but NTN’s Asian focus and cost structure help it compete in price-sensitive markets. Schaeffler’s debt levels are also high, similar to NTN’s.
• The Timken Company (TIMKEN): Timken excels in engineered bearings and power transmission products, with a strong North American industrial base. Its margins are healthier than NTN’s, but NTN’s exposure to Asian EV and renewable energy markets provides growth potential. Timken’s size and brand give it an edge in heavy machinery sectors.