Idemitsu Kosan Adjusts Valuation Amid Rising Costs and Declining Sales

Idemitsu Kosan Co., Ltd., a prominent player in the oil industry, has recently undergone an adjustment in its evaluation. This revision reflects a shift in the company's valuation metrics, indicating a notable change in its financial standing.
Key financial indicators reveal that Idemitsu Kosan's price-to-earnings (P/E) ratio stands at 8, while its price-to-book value is recorded at 0.70. The enterprise value to EBITDA ratio is noted at 8.35, and the enterprise value to sales ratio is significantly low at 0.24. The company's return on capital employed (ROCE) is currently at 5.90%, and its return on equity (ROE) is at 8.82%.

Despite these metrics, the company has faced challenges, including a decline in net sales, which reached JPY 1,843,035 million, and a substantial increase in raw material costs, which rose by 52.54% year-over-year. Additionally, the company has experienced a consistent underperformance against market benchmarks over the past three years, with a return of -5.35% in the last year.

This adjustment in evaluation underscores the complexities surrounding Idemitsu Kosan's market position and financial health.

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