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Towa Pharmaceutical Co
(4553)
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Rating:47Neutral
Price Target:
¥3,443.00
▼(-4.89% Downside)
Action:Reiterated
Date:08/09/26
The score is held back primarily by weakened profitability, elevated leverage, and thin/volatile free cash flow despite solid revenue growth and stable gross margins. Technically, momentum is soft (negative MACD and below the 20-day average). Valuation provides only moderate support, as the high P/E is only partially offset by a ~2% dividend yield.
Positive Factors
Revenue growth with stable gross margin
Continued top-line expansion alongside a steady gross margin indicates that Towa is retaining reasonably consistent product economics as sales grow. This supports the durability of its generic portfolio and provides a foundation for recovering profitability if cost pressures ease.
Negative Factors
Sharp profitability compression
The large decline in net and operating margins shows that revenue growth is currently producing much less earnings than in prior periods. Persistently weaker profitability could reduce internally funded investment, limit returns, and make future growth more dependent on successful cost control.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue growth with stable gross margin
Continued top-line expansion alongside a steady gross margin indicates that Towa is retaining reasonably consistent product economics as sales grow. This supports the durability of its generic portfolio and provides a foundation for recovering profitability if cost pressures ease.
Read all positive factors
Towa Pharmaceutical Co (4553) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥179.39B
Dividend Yield2.23%
Average Volume (3M)100.52K
Price to Earnings (P/E)21.4
Beta (1Y)0.55
Revenue Growth6.78%
EPS Growth-48.34%
CountryJP
Employees4,923
SectorGeneral
Sector StrengthN/A
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)167.96
Shares Outstanding51,516,000
10 Day Avg. Volume101,500
30 Day Avg. Volume100,520
Financial Highlights & Ratios
PEG Ratio-0.52
Price to Book (P/B)1.11
Price to Sales (P/S)0.72
P/FCF Ratio24.19
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)465.86
Revenue Forecast (FY)¥305.91B
Towa Pharmaceutical Co Business Overview & Revenue Model
Company Description
Towa Pharmaceutical Co., Ltd., along with its subsidiaries, is actively engaged in the entire pharmaceutical lifecycle within Japan, from researching and developing to manufacturing and marketing prescription medications, active pharmaceutical ing...
How the Company Makes Money
Towa Pharmaceutical makes money mainly by selling generic prescription medicines in Japan. Its core revenue stream is the supply of generic drug products to pharmaceutical wholesalers, medical institutions (such as hospitals), and dispensing pharm...
Towa Pharmaceutical Co Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
48
Neutral
Cash Flow
39
Negative
| Breakdown | TTM | Mar 2026 | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 279.94B | 273.71B | 259.59B | 227.93B | 208.86B | 165.62B |
| Gross Profit | 101.53B | 99.10B | 94.73B | 81.38B | 72.71B | 70.19B |
| EBITDA | 40.10B | 38.26B | 48.06B | 43.29B | 25.14B | 33.43B |
| Net Income | 8.27B | 5.25B | 18.99B | 16.17B | 2.20B | 15.91B |
Balance Sheet | ||||||
| Total Assets | 480.71B | 475.29B | 470.82B | 430.65B | 371.35B | 332.10B |
| Cash, Cash Equivalents and Short-Term Investments | 42.23B | 45.31B | 45.47B | 29.65B | 24.26B | 32.83B |
| Total Debt | 229.93B | 226.74B | 230.98B | 202.36B | 161.52B | 140.70B |
| Total Liabilities | 298.23B | 297.18B | 299.19B | 274.76B | 234.45B | 199.93B |
| Stockholders Equity | 182.48B | 178.10B | 171.63B | 155.89B | 136.89B | 132.17B |
Cash Flow | ||||||
| Free Cash Flow | 4.28B | 8.15B | -5.33B | -29.64B | -26.19B | 10.99B |
| Operating Cash Flow | 25.27B | 30.43B | 23.40B | 8.21B | 2.54B | 22.13B |
| Investing Cash Flow | -24.25B | -25.66B | -31.29B | -40.39B | -30.28B | -59.73B |
| Financing Cash Flow | -13.43B | -6.83B | 21.57B | 35.41B | 17.48B | 46.54B |
Towa Pharmaceutical Co Technical Analysis
Neutral
3620.00
Price Trends
3705.00
Negative
3787.51
Negative
3821.04
Negative
Market Momentum
-27.57
Negative
51.36
Neutral
66.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4553, the sentiment is Neutral. The current price of 3620 is above the 20-day moving average (MA) of 3591.48, below the 50-day MA of 3705.00, and below the 200-day MA of 3821.04, indicating a neutral trend. The MACD of -27.57 indicates Negative momentum. The RSI at 51.36 is Neutral, neither overbought nor oversold. The STOCH value of 66.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4553.
Towa Pharmaceutical Co Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | ¥107.87B | 12.13 | 6.64% | 2.62% | 14.72% | 52.55% | |
65 Neutral | ¥136.87B | 13.90 | 6.94% | 4.97% | -6.86% | -17.71% | |
64 Neutral | ¥155.01B | 11.14 | 6.31% | 4.46% | 10.35% | 16.60% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
52 Neutral | ¥56.38B | 28.41 | ― | 2.27% | -4.71% | -78.91% | |
52 Neutral | ¥162.51B | 21.51 | ― | 3.37% | 11.08% | 701.86% | |
47 Neutral | ¥179.39B | 21.37 | 4.53% | 2.34% | 6.78% | -48.34% |
* General Sector Average
JP:4553
Towa Pharmaceutical Co
3,590.00
800.66
28.70%
JP:4521
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JP:4887
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-221.72
-12.03%
Towa Pharmaceutical Co Corporate Events
Towa Pharmaceutical Clarifies Segment Structure in Q1 FY2027 Disclosure
Aug 6, 2026
Towa Pharmaceutical has released supplementary materials for its first-quarter financial results for the fiscal year ending March 31, 2027, clarifying how it segments and reports its operations. The company groups several domestic subsidiaries und...
Towa Pharmaceutical Delivers Profit Surge and Keeps Robust Outlook
Aug 6, 2026
Towa Pharmaceutical reported strong first-quarter results for the fiscal year ending March 31, 2027, with net sales rising 9.6% year on year to ¥71.38 billion and operating profit up 25.2%. Ordinary profit more than doubled, and profit attrib...
Towa Pharmaceutical Completes ¥10 Billion Class A Preferred Share Issuance and Capital Restructuring
Jul 31, 2026
Towa Pharmaceutical Co., Ltd. has completed payment for the issuance of its 1st Series Class A preferred shares via a third-party allotment to Development Bank of Japan Inc., raising 10 billion yen in new funds. The preferred share issuance increa...
Towa Pharmaceutical Completes Restricted Stock Compensation Share Disposal
Jul 10, 2026
Towa Pharmaceutical has completed the payment procedures for the disposal of 1,188 shares of its treasury stock under a restricted stock compensation scheme. The shares, priced at JPY 3,835 each for a total of JPY 4,555,980, were allotted to three...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.