Daiichi Sankyo Company (4568) AI Stock Analysis

• Market Cap: ¥6.95T
• Dividend Yield: 1.52%
• Average Volume (3M): 6.52M
• Price to Earnings (P/E): 23.7
• Beta (1Y): 0.90
• Revenue Growth: 17.77%
• EPS Growth: 48.97%
• Country: JP
• Employees: 18,726
• Sector: Healthcare
• Sector Strength: 60
• Industry: Drug Manufacturers - General
• EPS (TTM): 46.31
• Shares Outstanding: 1,908,322,100
• 10 Day Avg. Volume: 5,384,730
• 30 Day Avg. Volume: 6,519,670
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥5,900.44
• Price Target Upside: 59.39% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Daiichi Sankyo demonstrates solid financial performance with strong revenue growth and effective cost management, leading to a stable financial foundation. The earnings call provided positive insights, although some financial uncertainties and revised sales forecasts pose potential risks. Technical indicators suggest caution due to downward momentum, while valuation metrics appear reasonable but not exceptionally attractive.

Positive Factors

Drug Development

Advancing to Enhertu’s filing for 1L HER2+ BC with strong DB09 interim data shows promising progress in drug development.

FDA Approval

FDA has approved anticancer candidate Dato-DXd for breast cancer, which is considered a positive surprise by the market.

Share Buyback

A recent JPY200Bn-buyback was conducted in defiance of the weak stock price, indicating confidence in the company's corporate value.

Negative Factors

Disappointing Study Data

Daiichi's shares have declined by about 1/3 since the company reported disappointing Ph2 data from the TROPION-Lung01 study.

Share Price Decline

Daiichi's shares have declined by about 1/3 since the company reported disappointing data from a lung cancer study.

Daiichi Sankyo Company Business Overview & Revenue Model

Company Description

Daiichi Sankyo Company, Limited researches and develops, manufactures, imports, markets, and sells pharmaceutical products worldwide. The company offers trastuzumab deruxtecan, an anti-cancer agent and anti-HER2 antibody drug conjugate; mirogabalin for pain treatment; teneligliptin/canagliflozin for type 2 diabetes mellitus treatment; lacosamide anti-epileptic agent; prasugrel, an antiplatelet agent; denosumab for osteoporosis and bone disorders; teneligliptin for type 2 diabetes mellitus treatment; edoxaban, an anticoagulant; esomeprazole for ulcer treatment; memantine for treating Alzheimer's disease; and laninamivir for anti-influenza treatment. It also provides olmesartan, an antihypertensive agent; levofloxacin, an antibacterial agent; pravastatin for hypercholesterolemia treatment; and loxoprofen, an anti-inflammatory analgesic. In addition, the company offers colesevelam for treating hypercholesterolemia and type 2 diabetes mellitus treatment; and ferric carboxymaltose and iron sucrose injections for treating anemia. Further, it provides Lulu, a combination cold remedy; Loxonin S, an antipyretic analgesic /anti-inflammatory analgesic; Transino for melasma improvement and treating against spots and freckles; Minon, a skincare product; and Breath Labo and Clean Dental oral care products, as well as Silodosin for dysuria; Gefitinib for malignant tumours; Bicalutamide for prostate cancer; and Tamoxifen, an anti-breast cancer agent. Additionally, the company offers adsorbed cell culture-derived influenza, influenza HA, measles rubella combined, and mumps vaccines. It also provides pharmaceuticals and drugs for animals, cosmetics, medical equipment, food products, drinking water, active pharmaceutical ingredients, and intermediates. It has collaboration with Guardant Health to develop Guardant360 CDx as a companion diagnostic for Enhertu in advanced metastatic non-small cell lung cancer. The company was founded in 1899 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Daiichi Sankyo makes money through the development, manufacturing, and distribution of pharmaceutical products. The company's primary revenue streams come from the sales of proprietary prescription drugs, particularly in the areas of oncology and cardiovascular medicine. Daiichi Sankyo also generates income from licensing agreements and partnerships with other pharmaceutical companies, which can include joint ventures and collaborative research projects. Additionally, the company benefits from patent protections on its proprietary drugs, allowing it to maintain market exclusivity for certain products. Revenue is further supported by its generic drug division, which provides more affordable medication options. The company's earnings are influenced by factors such as regulatory approvals, healthcare policies, and market competition.

Daiichi Sankyo Company Financial Statement Overview

Summary

Daiichi Sankyo exhibits strong financial performance with robust revenue growth and efficient cost management. The balance sheet reflects financial stability and conservative leverage, reducing financial risk. While operational cash flow remains strong, negative Free Cash Flow raises concerns about cash management. Continued focus on managing capital expenditures will be crucial to maintain liquidity.

Income Statement

Daiichi Sankyo demonstrated robust revenue growth, with a significant increase from 1.28 trillion to 1.89 trillion JPY over the past year, showing a positive growth trajectory. The Gross Profit Margin remains strong, reflecting efficient cost management. EBIT and EBITDA margins have improved, indicating better operational efficiency. However, the Net Profit Margin slightly decreased due to higher costs, which should be monitored.

Balance Sheet

The company maintains a solid equity position with a high Equity Ratio, suggesting financial stability. The Debt-to-Equity Ratio is low, indicating conservative use of leverage, which reduces financial risk. Return on Equity is strong, reflecting effective use of shareholders' funds to generate profits. Overall, the balance sheet presents a stable financial foundation.

Cash Flow

Operating Cash Flow to Net Income Ratio indicates a healthy conversion of income into cash. However, Free Cash Flow has turned negative, mainly due to significant capital expenditures. This could impact future financial flexibility if not managed properly. The Free Cash Flow to Net Income Ratio has worsened, indicating potential liquidity challenges.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
1.60T	1.28T	1.04T	962.52B	981.79B
	Gross Profit
1.19T	914.95B	691.56B	624.23B	638.59B
	EBIT
211.59B	120.58B	73.03B	63.80B	138.80B
	EBITDA
305.46B	169.72B	143.05B	121.18B	191.41B
	Net Income Common Stockholders
200.73B	109.19B	66.97B	75.96B	129.07B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
876.56B	825.13B	843.85B	824.91B	890.71B
	Total Assets
3.46T	2.51T	2.22T	2.09T	2.11T
	Total Debt
156.00B	143.09B	163.46B	183.83B	224.20B
	Net Debt
-259.26B	-298.83B	-499.02B	-196.72B	-199.98B
	Total Liabilities
1.77T	1.06T	870.53B	813.13B	799.35B
	Stockholders Equity
1.69T	1.45T	1.35T	1.27T	1.31T
Cash Flow		Free Cash Flow
476.47B	47.15B	62.54B	128.11B	144.04B
	Operating Cash Flow
599.26B	114.51B	139.23B	192.21B	196.60B
	Investing Cash Flow
-282.64B	-257.78B	212.34B	-39.25B	81.67B
	Financing Cash Flow
-123.56B	-89.59B	-86.23B	-202.43B	-91.64B

Daiichi Sankyo Company Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3702.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4568, the sentiment is Neutral. The current price of 3702 is above the 20-day moving average (MA) of 3339.35, above the 50-day MA of 3462.16, and below the 200-day MA of 4521.49, indicating a neutral trend. The MACD of 27.21 indicates Negative momentum. The RSI at 63.34 is Neutral, neither overbought nor oversold. The STOCH value of 92.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4568.

Daiichi Sankyo Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4519	79 Outperform	$14.17T	34.58	22.80%	1.03%	17.96%	25.65%
4568	78 Outperform	¥6.95T	23.74	17.60%	1.52%	17.77%	48.97%
4503	77 Outperform	¥2.63T	51.43	3.22%	4.94%	19.25%	294.48%
4502	68 Neutral	$7.00T	33.49	2.87%	4.31%	9.83%	15.49%
4523	65 Neutral	$1.20T	20.65	6.83%	3.54%	5.63%	30.61%
4506	54 Neutral	¥373.85B	―	-68.59%	―	12.84%	-1.34%
Sector *	52 Neutral	$5.24B	3.76	-41.88%	2.85%	17.01%	0.78%