WEBULL

Kobe Bussan (TSE:3038): Valuation Check After Record Earnings, Upgraded Guidance and Higher Dividends

Simply Wall St · 1d ago

Kobe Bussan (TSE:3038) just delivered record full year earnings, raised its 2026 guidance, and sweetened both ordinary and special dividends, a combination that naturally puts the stock firmly on investors radar right now.

See our latest analysis for Kobe Bussan.

The market seems to be catching up to that story, with an 8.45% 1 day share price return and a 15.77% year to date share price return. The 5 year total shareholder return of 28.96% points to steady, rather than explosive, long term compounding, suggesting momentum is picking up again after a softer recent quarter.

If this kind of earnings fueled move has your attention, it could be a good moment to broaden your search and discover fast growing stocks with high insider ownership.

With the shares already rebounding and guidance moving higher, investors now face a familiar dilemma: is Kobe Bussan still trading below its fundamentals, or is the current rally simply the market pricing in that future growth?

Price to Earnings of 27.6x: Is it justified?

On a trailing basis, Kobe Bussan trades on a 27.6x price to earnings ratio at ¥3964, a clear premium to both peers and the wider consumer retailing space.

The price to earnings multiple compares the company’s share price to its earnings per share, making it a simple way to see how much investors are paying today for each unit of profit. For a food focused retailer and franchise operator like Kobe Bussan, this lens is especially important because earnings are relatively steady and investors can quickly benchmark it against similar domestic operators.

Here, the market is assigning a richer valuation than most comparables, which suggests investors are either banking on the company sustaining its strong recent profit growth or are comfortable paying up for its business model and earnings quality. That optimism looks stretched when set against the estimated fair price to earnings ratio of 21.7x, a level the market could revert toward if sentiment cools or growth normalises.

The premium really stands out next to the 13.2x average for the JP Consumer Retailing industry and the 22.6x peer average, underlining how assertively the market is pricing Kobe Bussan’s earnings power today.

Explore the SWS fair ratio for Kobe Bussan

Result: Price to earnings of 27.6x (OVERVALUED)

However, the narrative could quickly unravel if consumer demand softens or if margins compress, especially with shares already trading above estimated fair value.

Find out about the key risks to this Kobe Bussan narrative.

Another View: Our DCF Points the Other Way

While the 27.6x earnings multiple looks stretched, our DCF model paints a different picture. It suggests fair value closer to ¥5087, about 22.1% above today’s ¥3964 price. If cash flows justify a premium, is the market still underestimating the longer term story?

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

3038 Discounted Cash Flow as at Dec 2025
3038 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 Kobe Bussan 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 901 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 Kobe Bussan Narrative

If you see the numbers differently, or simply want to dig into the data yourself, you can build a custom view in minutes: Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Kobe Bussan.

Ready for your next investing move?

Do not stop at a single opportunity when you can scan the market for fresh ideas, sharpen your strategy and stay ahead of slower reacting investors.

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.