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ITOCHU (TSE:8001) Valuation Check After New Decarbonization Push in Live Oak e-NG Project

Simply Wall St · 1d ago

ITOCHU (TSE:8001) just deepened its decarbonization push, joining Osaka Gas, Toho Gas, TotalEnergies, and TES in the Live Oak e natural gas project in Nebraska, which is aimed at exporting carbon neutral gas to Japan.

See our latest analysis for ITOCHU.

Investors seem to be rewarding this decarbonization pivot, with ITOCHU posting a 19.71% year to date share price return and a hefty 141.86% three year total shareholder return, suggesting positive momentum rather than a short lived spike.

If this shift toward cleaner energy has you rethinking your watchlist, it could be a good time to explore fast growing stocks with high insider ownership for other fast growing, high conviction ideas.

With the shares already up strongly and trading only modestly below analyst targets, the big question now is whether ITOCHU is still trading at a discount or if markets have fully priced in its decarbonization-driven growth potential.

Most Popular Narrative Narrative: 4.5% Undervalued

With ITOCHU last closing at ¥9,334 against a narrative fair value of ¥9,770, the story points to modest upside grounded in steady fundamentals.

Progress on asset replacement and active portfolio management, along with robust share buyback activity, is likely to drive EPS growth and support shareholder returns, which may not be fully reflected in the current valuation.

Read the complete narrative.

Curious how modest revenue growth, slimmer margins, and shrinking share count can still support a richer earnings multiple than the industry? Explore the full valuation playbook to see how these pieces fit together.

Result: Fair Value of ¥9,770 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent reliance on resource-linked earnings and softer demand in key markets like China could still derail the growth narrative driven by decarbonization.

Find out about the key risks to this ITOCHU narrative.

Another View: Cash Flow Model Flips the Story

While the narrative fair value suggests ITOCHU is modestly undervalued, our DCF model presents a less favorable view, indicating the shares trade above an estimated fair value of around ¥7,424. That implies limited upside from here and raises a tougher question: is the market now overpaying for stability and decarbonization momentum?

Look into how the SWS DCF model arrives at its fair value.

8001 Discounted Cash Flow as at Dec 2025
8001 Discounted Cash Flow as at Dec 2025

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out ITOCHU for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 908 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own ITOCHU Narrative

If you see the story differently, or simply prefer to dig into the numbers yourself, you can build a custom narrative in just a few minutes: Do it your way.

A great starting point for your ITOCHU research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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ITOCHU may fit your thesis today, but ignoring other strong opportunities could hold back your long term returns and limit your portfolio’s potential.

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.