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Towa Pharmaceutical Co
(4553)
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Rating:47Neutral
Price Target:
¥3,891.00
▲(7.49% Upside)
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
Continued revenue expansion indicates sustained demand for Towa’s generic medicines and broadens the company’s revenue base. Growth provides operating scale and supports future product launches, although profitability must improve for this benefit to translate into stronger returns.
Negative Factors
Profitability Compression
Sharp declines in net and EBIT margins show that revenue growth is not converting efficiently into earnings. With TTM net income well below FY2025, sustained cost pressure or unfavorable operating factors could limit reinvestment and weaken shareholder returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue Growth
Continued revenue expansion indicates sustained demand for Towa’s generic medicines and broadens the company’s revenue base. Growth provides operating scale and supports future product launches, although profitability must improve for this benefit to translate into stronger returns.
Read all positive factors
Towa Pharmaceutical Co (4553) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥191.20B
Dividend Yield2.02%
Average Volume (3M)112.31K
Price to Earnings (P/E)23.6
Beta (1Y)0.47
Revenue Growth6.78%
EPS Growth-48.34%
CountryJP
Employees4,923
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)167.96
Shares Outstanding51,516,000
10 Day Avg. Volume138,760
30 Day Avg. Volume112,306
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 Target
¥5,600.00Price Target Upside54.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
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 primarily makes money by selling prescription generic drugs in Japan. Its core revenue stream comes from supplying generic equivalents of branded medicines after patent/market exclusivity expires; these products are sold throug...
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
Positive
3620.00
Price Trends
3940.20
Positive
3949.65
Positive
3773.64
Positive
Market Momentum
-29.74
Negative
53.36
Neutral
83.84
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4553, the sentiment is Positive. The current price of 3620 is below the 20-day moving average (MA) of 3884.25, below the 50-day MA of 3940.20, and below the 200-day MA of 3773.64, indicating a bullish trend. The MACD of -29.74 indicates Negative momentum. The RSI at 53.36 is Neutral, neither overbought nor oversold. The STOCH value of 83.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4553.
Towa Pharmaceutical Co Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | ¥112.63B | 12.86 | 5.81% | 2.34% | 14.72% | 52.55% | |
64 Neutral | ¥166.45B | 12.18 | 6.37% | 2.60% | 10.35% | 16.60% | |
63 Neutral | ¥143.53B | 14.74 | 1.46% | 4.85% | -6.86% | -17.71% | |
52 Neutral | ¥61.64B | 31.19 | ― | 4.71% | -4.71% | -78.91% | |
52 Neutral | ¥161.17B | 21.52 | ― | 2.28% | 11.08% | 701.86% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
47 Neutral | ¥191.20B | 23.58 | 2.92% | 2.14% | 6.78% | -48.34% |
* Healthcare Sector Average
JP:4553
Towa Pharmaceutical Co
3,960.00
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36.20%
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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...
Towa Pharma to Acquire Tanabe Pharma Factory and Expand Off‑Patent Drug Portfolio
Jul 3, 2026
Towa Pharmaceutical has agreed to acquire all shares of Tanabe Pharma Factory Co., Ltd. from Tanabe Pharma Corporation, turning it into a wholly owned subsidiary to reinforce its production base. Tanabe Pharma Factory brings global-standard manufa...
Towa Pharmaceutical Clarifies Relationship With Controlling Shareholder YOSHIDA JIMUSHO
Jun 24, 2026
Towa Pharmaceutical disclosed that YOSHIDA JIMUSHO, classified as another affiliated company, holds a total of 45.75% of its voting rights, with 40.85% held directly and 4.90% through aggregation as of March 31, 2026. The company also noted that i...
Towa Pharmaceutical Details Parent Firm Ownership and Governance Structure
Jun 24, 2026
Towa Pharmaceutical disclosed the financial results and corporate profile of its parent company, YOSHIDA JIMUSHO, for the fiscal year ended March 31, 2026, underscoring the governance and ownership ties that shape its control structure. YOSHIDA JI...
Towa Pharmaceutical Grants Restricted Treasury Shares to Directors Under Long-Term Incentive Plan
Jun 24, 2026
Towa Pharmaceutical’s board has approved the disposal of 1,188 treasury shares as restricted stock, valued at about ¥4.56 million, to three internal directors as part of its existing stock-based compensation scheme. The payment price is...
Towa Pharmaceutical Reshapes Board with New Strategy and Governance Appointments
Jun 24, 2026
Towa Pharmaceutical Co., Ltd. announced changes to its executive lineup following approvals at its Ordinary General Meeting of Shareholders and subsequent board meeting held on June 24, 2026. The company reaffirmed continuity at the top, reappoint...
Towa Pharmaceutical Revamps Board With New Director and Governance-Focused Appointments
May 21, 2026
Towa Pharmaceutical has announced changes to its board, proposing the reappointment of President and Representative Director Itsuro Yoshida and other incumbent directors, while promoting Hideshi Nakamura, currently General Manager of the President...
Towa Pharmaceutical to Raise Up to ¥20 Billion via DBJ Preferred Share Allotment
May 21, 2026
Towa Pharmaceutical plans to issue up to ¥20 billion in Class A preferred shares through a third-party allotment to Development Bank of Japan, alongside partial amendments to its Articles of Incorporation and a corresponding reduction of shar...
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.