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Japan TobaccoJAPAF +8.56%79 Degree of Operating Leverage is 7.34 as of Jun. 2026. GuruFocus rates JAPAF with a GF Score™ of 79/100 and a GF Value™ of $36.14 (Modestly Overvalued). The stock has 7 warning signs investors should review. Among 45 Tobacco Products companies, Japan Tobacco ranks worse than 84.44% on this metric.
Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
Japan Tobacco's Degree of Operating Leverage for the quarter that ended in Jun. 2026 was 7.34. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for Japan Tobacco's Degree of Operating Leverage or its related term are showing as below:
JAPAF's Degree of Operating Leverage is ranked worse than 84.44% of 45
companies
in the Tobacco Products industry
Industry Median: 0.26
vs JAPAF: 7.34
Japan Tobacco (OTCPK:JAPAF) Degree of Operating Leverage Explanation
Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.
A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.
Be Aware
The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.
Japan Tobacco Degree of Operating Leverage Related Terms
Japan Tobacco Degree of Operating Leverage Historical Data
* Premium members only.
The historical data trend for Japan Tobacco's Degree of Operating Leverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
JAPAF vs PM, MO, TPB: Degree of Operating Leverage Comparison
For the Tobacco subindustry, Japan Tobacco's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Japan Tobacco Degree of Operating Leverage vs Tobacco Products Industry
For the Tobacco Products industry and Consumer Defensive sector, Japan Tobacco's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where Japan Tobacco's Degree of Operating Leverage falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
What does a Degree of Operating Leverage of 7.34 mean?
Japan Tobacco (JAPAF) has a Degree of Operating Leverage of 7.34 as of Jun. 2026. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Japan Tobacco and its competitors. According to the industry distribution chart, Japan Tobacco ranks #38 out of 45 companies in the Tobacco Products industry, placing it in the top 84.4%.
Is Japan Tobacco's Degree of Operating Leverage too high?
Japan Tobacco's current Degree of Operating Leverage is 7.34. The Tobacco Products industry median Degree of Operating Leverage is 0.26. Japan Tobacco's value of 7.34 is 2723.1% above this industry median. Based on the distribution chart, Japan Tobacco ranks #38 out of 45 companies in the Tobacco Products industry, which is in the bottom quartile relative to peers. Overall, Japan Tobacco has a GF Score™ of 79/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Japan Tobacco's Degree of Operating Leverage compare to PM and MO?
According to the Tobacco Products industry distribution chart, Japan Tobacco ranks #38 out of 45 companies for Degree of Operating Leverage. This places Japan Tobacco in the lower half of its industry. The industry median Degree of Operating Leverage is 0.26. Japan Tobacco's value of 7.34 is 2723.1% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Degree of Operating Leverage for a Tobacco Products company?
The median Degree of Operating Leverage among Tobacco Products companies is 0.26, based on 45 companies in the industry. Companies in the top quartile (top 25%) have a Degree of Operating Leverage significantly above this median, while those in the bottom quartile fall well below. However, Degree of Operating Leverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Japan Tobacco's current Degree of Operating Leverage of 7.34 is 2723.1% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Degree of Operating Leverage mean?
A high Degree of Operating Leverage can signal that a stock is expensive relative to its fundamentals. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Japan Tobacco and its competitors. For the Tobacco Products industry, the median Degree of Operating Leverage is 0.26 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Japan Tobacco's current Degree of Operating Leverage is 7.34. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Japan Tobacco stock overvalued right now?
Based on GuruFocus' analysis, Japan Tobacco (JAPAF) is currently considered Modestly Overvalued. The stock's GF Value™ is $36.14, compared to a current price of $45.40 — trading 25.6% above its estimated fair value. The current Degree of Operating Leverage is 7.34 and 2723.1% above the Tobacco Products industry median of 0.26. Japan Tobacco's overall GF Score™ is 79/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Degree of Operating Leverage calculated?
Degree of Operating Leverage is calculated from a company's financial statements. For Japan Tobacco (JAPAF), the current Degree of Operating Leverage is 7.34 as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Japan Tobacco (JAPAF) Overvalued in 2026?
Based on GuruFocus' analysis, Japan Tobacco stock appears to be overvalued.
The current stock price of $45.40 is trading 25.6% above its estimated GF Value™ of $36.14.
GuruFocus considers Japan Tobacco to be Modestly Overvalued.
Key valuation signals for JAPAF:
Degree of Operating Leverage: 7.34
GF Value™: $36.14 vs. price of $45.40 (25.6% above fair value)
Industry Position: 2723.1% above the Tobacco Products median (#38 of 45)
No single metric tells the full story. See the JAPAF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Japan Tobacco primarily sells cigarettes and reduced-risk products, organized in three clusters consisting of Asia (which includes its home market and countries in Asia Pacific), Western Europe, and EMA (which includes Eastern Europe, the Middle East North Africa, Turkey, Americas, and duty-free). Its leading cigarette brands include Winston (non-US), Camel (non-US), Mevius, and LD. Its reduced-risk brands include Logic in vaping, Ploom in heated tobacco, and Nordic Spirit in nicotine pouches, though these generates less than 5% of tobacco sales.
79GF Score
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