Analyst Euan McLeish from Bernstein maintained a Sell rating on Kikkoman (KIKOF – Research Report) and keeping the price target at Yen1,300.00.
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Euan McLeish’s rating is based on Kikkoman’s underperformance in its third-quarter results, which fell short of expectations. The company’s business profit declined by 7% year-over-year, coming in 5% below Bernstein’s estimates. A significant contributor to this shortfall was the weak performance in the U.S. Wholesale segment, where revenue growth slowed, and margins contracted by 60 basis points.
Kikkoman’s soy sauce division also struggled, with a notable decline in growth. The U.S. Foods margin dropped by 150 basis points, and soy sauce revenue growth decreased significantly from earlier quarters. Domestically, despite revenue exceeding expectations, the margins reduced by 151 basis points, leading to a considerable business profit miss in Japan. These factors, combined with potential risks from tariffs and competitive pressures in the U.S., underpin the Sell rating on Kikkoman’s stock.
KIKOF’s price has also changed slightly for the past six months – from $10.930 to $10.410, which is a -4.76% drop .