⚠ ROE Is Drifting DownModerate threat

ITOCHU (8001) — threat to the moat

ITOCHU's return on equity has fallen by a third in four years as its equity grew faster than its profit.

ITOCHU's ROE was 21.8% in the year to March 2022, 17.7% in 2023, 15.6% in 2024, 15.7% in 2025 and 14.6% in 20261. It is still well above the company's cost of capital of about 8%2, and below its aim of about 15%3.

Return on equity, % (years to March)21.8202217.7202315.6202415.7202514.62026ITOCHU FIR 2026
A steady decline from the 2022 peak.

Equity grew faster than profit. Shareholders' equity rose from ¥5,755,072 million to ¥6,589,966 million in the latest year4, up about 15%5, while net profit rose about 2%6.

Book value per share rose from ¥754.35 to ¥942.78 in two years, split-adjusted7. The shares trade at about 2.2 times book8.

The measure is ROE after the ¥300.0 billion buyback9. A return toward 15% would say the buyback has restored the balance between equity and profit.

References
  1. ReportedITOCHU's ROE was 21.8% in the year to March 2022, 17.7% in 2023, 15.6% in 2024, 15.7% in 2025 and 14.6% in 2026.
    ITOCHU Corporation, Financial Information Report 2026 - the six-year financial summary, ROE, employees and market capitalisation. — FY to March 2026 · publ. 12 June 2026 · source ↗
  2. ReportedIt is still well above the company's cost of capital of about 8%, and below its aim of about 15%.
    ITOCHU Corporation, CFO message, Integrated Report 2026 - the cost of capital of approximately 8%, about 70 business-specific hurdle rates, and the aim to sustain ROE at the 15% level. — 2026 · publ. July 2026 · source ↗
  3. ReportedIt is still well above the company's cost of capital of about 8%, and below its aim of about 15%.
    ITOCHU Corporation, CFO message, Integrated Report 2026 - the cost of capital of approximately 8%, about 70 business-specific hurdle rates, and the aim to sustain ROE at the 15% level. — 2026 · publ. July 2026 · source ↗
  4. ReportedShareholders' equity rose from ¥5,755,072 million to ¥6,589,966 million in the latest year, up about 15%, while net profit rose about 2%.
    ITOCHU Corporation, Financial Information Report 2026 - the audited financial statements, segment information, the customer statement, goodwill including FamilyMart, CITIC and the risk factors. — FY to March 2026 · publ. 12 June 2026 · source ↗
  5. Moat Explorer calcShareholders' equity rose from ¥5,755,072 million to ¥6,589,966 million in the latest year, up about 15%, while net profit rose about 2%.
    Moat Explorer calculation from ITOCHU's reported figures. Trailing twelve months to June 2026: net profit 900.3 - 283.9 + 293.8 = 910.1; revenue 14,823.1 - 3,558.9 + 3,875.9 = 15,140.1; EPS 128.00 - 40.10 + 42.02 = 129.92. Market value at 24 September 2026: 6,993,053,267 shares x ¥2,220.5 = ¥15.53 trillion. P/E at March year-end: market value over net profit, e.g. 13,802 / 900.3 = 15.3 (2026), 6,090 / 820.3 = 7.4 (2022), 3,046 / 500.5 = 6.1 (2019). Non-resource share of profit: 774.7 / (774.7 + 133.3) = 85%. Segment net profit over segment assets, year to March 2026: Machinery 155.6 / 2,603.5 = 6.0%; Metals & Minerals 143.5 / 1,793.4 = 8.0%; ICT & Financial 93.0 / 1,577.2 = 5.9%; Food 92.1 / 2,403.4 = 3.8%; Energy & Chemicals 69.3 / 1,819.4 = 3.8%; General Products & Realty 60.8 / 1,628.7 = 3.7%; The 8th 45.0 / 2,197.3 = 2.0%; Textile 43.3 / 751.9 = 5.8%. Segment net margin on revenue: Food 92.1 / 5,134.2 = 1.8%; Energy & Chemicals 69.3 / 3,069.6 = 2.3%; Machinery 155.6 / 1,500.6 = 10.4%; Metals & Minerals 143.5 / 1,231.5 = 11.7%. Berkshire's market value over cost: 8,886 / 4,165 = 2.13 times; dividend on cost 181 / 4,165 = 4.3%. Self-tender: 82,735,750 x ¥1,813 = about ¥150.0 billion. Net profit growth since the year to March 2016: 900.3 / 240.4 = 3.7 times. Dividend growth: 42.0 / 10.0 = 4.2 times (split-adjusted). ROE spread over the company's cost of capital: 14.6 - 8 = 6.6 points. Equity growth: 6,590.0 / 5,755.1 = 1.15. Stake in DENTSU SOKEN at the tender price: ¥215.2 billion for 38%. ACG profit target over investment: ¥50 billion is the aerospace target, about ¥310 billion the ACG investment. Berkshire's stake at ¥2,220.5: 704,799,500 x 2,220.5 = about ¥1.565 trillion. ITOCHU over Marubeni net profit: 900.3 / 543.9 = 1.66. 8% hurdle on the CSN Mineração additional investment: 0.08 x 119.2 = 9.5. 8% hurdle on ¥215.2 billion: about ¥17.2 billion. — FY to March 2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in ITOCHU's financial statements, results decks and market data; operands shown in the source line.
  6. ReportedShareholders' equity rose from ¥5,755,072 million to ¥6,589,966 million in the latest year, up about 15%, while net profit rose about 2%.
    ITOCHU Corporation, Financial Information Report 2026 - the audited financial statements, segment information, the customer statement, goodwill including FamilyMart, CITIC and the risk factors. — FY to March 2026 · publ. 12 June 2026 · source ↗
  7. ReportedBook value per share rose from ¥754.35 to ¥942.78 in two years, split-adjusted.
    ITOCHU Corporation, Financial Information Report 2026 - the audited financial statements, segment information, the customer statement, goodwill including FamilyMart, CITIC and the risk factors. — FY to March 2026 · publ. 12 June 2026 · source ↗
  8. ReportedThe shares trade at about 2.2 times book.
    ITOCHU (TYO: 8001) statistics - price-to-book and enterprise value, September 2026. — September 2026 · publ. September 2026 · source ↗
  9. ReportedThe measure is ROE after the ¥300.0 billion buyback.
    ITOCHU Corporation, Consolidated Financial Results for the year ended March 31, 2026 (IFRS) - statements of comprehensive income, financial position and cash flows, the segment information by eight division companies, the share split, dividends, the buyback plan and the forecast for the year to March 2027. — FY to March 2026 · publ. 1 May 2026 · source ↗
Sources
Generated September 24, 2026