Daiichi Sankyo Company (4568) AI Stock Analysis

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JP:4568 Dividends

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Daiichi Sankyo Company

(OTC:4568)

72Outperform

Daiichi Sankyo demonstrates strong financial performance with robust revenue and profit growth, supported by effective cost management and a solid balance sheet. However, recent cash flow issues and bearish technical indicators are areas of concern. The valuation is moderate, and the positive earnings call reflects strong business prospects despite minor challenges.

Positive Factors

FDA Approval

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

Market Expectations

Expectations for Dato's first US approval for breast cancer are high, supported by approval from Japanese authorities.

Valuation and Earnings

Daiichi Sankyo is trading at an attractive valuation, with expectations of the company's EPS expanding over the next five years.

Negative Factors

Price Control Measures

The US has implemented price control measures for Medicare under Biden administration, DS anticipates this trend to continue under Trump.

Stock Decline

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

Daiichi Sankyo Company (4568) vs. S&P 500 (SPY)

Market Cap

$5.83T

Dividend Yield1.71%

Average Volume (3M)6.57M

Price to Earnings (P/E)24.1

Beta (1Y)0.86

Revenue Growth19.46%

EPS Growth32.98%

CountryJP

Employees18,726

SectorHealthcare

Sector Strength64

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)32.82

Shares Outstanding1,908,322,100

10 Day Avg. Volume9,062,060

30 Day Avg. Volume6,570,433

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

Price to Cash Flow (P/CF)N/A

P/FCF RatioN/A

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$5,666.38

Price Target Upside72.34% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

Daiichi Sankyo Company Business Overview & Revenue Model

Company DescriptionDaiichi Sankyo Company, Limited is a leading global pharmaceutical company headquartered in Tokyo, Japan. It operates in the healthcare sector, focusing primarily on the research, development, and marketing of a wide range of pharmaceuticals. The company's core products include innovative medicines for cardiovascular, oncology, and rare diseases, as well as generic pharmaceuticals.

How the Company Makes MoneyDaiichi 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

Income Statement

Balance Sheet

Cash Flow

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
1.80T	1.60T	1.28T	1.04T	962.52B	981.79B
	Gross Profit
1.37T	1.19T	914.95B	691.56B	624.23B	638.59B
	EBIT
264.75B	211.59B	120.58B	73.03B	63.80B	138.80B
	EBITDA
332.03B	305.46B	169.72B	143.05B	121.18B	191.41B
	Net Income Common Stockholders
245.77B	200.73B	109.19B	66.97B	75.96B	129.07B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
386.63B	876.56B	825.13B	843.85B	824.91B	890.71B
	Total Assets
1.47T	3.46T	2.51T	2.22T	2.09T	2.11T
	Total Debt
255.35B	156.00B	143.09B	163.46B	183.83B	224.20B
	Net Debt
128.94B	-259.26B	-298.83B	-499.02B	-196.72B	-199.98B
	Total Liabilities
578.69B	1.77T	1.06T	870.53B	813.13B	799.35B
	Stockholders Equity
857.09B	1.69T	1.45T	1.35T	1.27T	1.31T
Cash Flow		Free Cash Flow
-115.54B	476.47B	47.15B	62.54B	128.11B	144.04B
	Operating Cash Flow
11.69B	599.26B	114.51B	139.23B	192.21B	196.60B
	Investing Cash Flow
303.70B	-282.64B	-257.78B	212.34B	-39.25B	81.67B
	Financing Cash Flow
-323.10B	-123.56B	-89.59B	-86.23B	-202.43B	-91.64B

Daiichi Sankyo Company Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3288.00

Price Trends

50DMA

3469.51

Negative

100DMA

3905.34

Negative

200DMA

4580.84

Negative

Market Momentum

MACD

-106.42

Negative

RSI

45.88

Neutral

STOCH

58.43

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4568, the sentiment is Negative. The current price of 3288 is below the 20-day moving average (MA) of 3362.90, below the 50-day MA of 3469.51, and below the 200-day MA of 4580.84, indicating a bearish trend. The MACD of -106.42 indicates Negative momentum. The RSI at 45.88 is Neutral, neither overbought nor oversold. The STOCH value of 58.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4568.

Daiichi Sankyo Company Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4519	79 Outperform	$10.34T	26.70	21.61%	1.07%	5.33%	18.98%
4568	72 Outperform	$5.83T	24.06	14.97%	1.71%	19.46%	32.98%
4502	68 Neutral	$6.82T	32.59	2.87%	4.04%	9.83%	15.49%
4523	65 Neutral	$1.14T	19.52	6.83%	3.54%	5.63%	30.61%
4503	62 Neutral	$2.29T	49.09	-3.80%	5.53%	21.01%	-12669.88%
Sector *	51 Neutral	$5.20B	3.26	-40.34%	2.93%	17.68%	1.94%
4506	39 Underperform	$245.92B	―	-68.59%	―	12.84%	-1.34%

* Healthcare Sector Average

Performance Comparison

JP:4568

Daiichi Sankyo Company

3,316.00

-1,382.75

-29.43%

JP:4506

Sumitomo Dainippon Pharma Co

650.00

250.00

62.50%

JP:4503

Astellas Pharma

1,368.00

-20.62

-1.49%

JP:4519

Chugai Pharmaceutical Co

8,194.00

3,368.28

69.80%

JP:4523

Eisai Co

4,072.00

-1,983.95

-32.76%

JP:4502

Takeda Pharmaceutical Co

4,332.00

422.18

10.80%

Daiichi Sankyo Company Earnings Call Summary

Earnings Call Date: Jan 31, 2025 | % Change Since: -24.87% | Next Earnings Date: Apr 25, 2025

Earnings Call Sentiment Positive

The earnings call presented a robust financial performance with significant revenue and profit growth, driven by strong product sales and successful patent settlements. However, slight downward adjustments in sales forecasts and potential financial uncertainties were noted.

Highlights

Revenue Surge

Revenue increased by JPY 225 billion or 23.7% year-on-year to reach JPY 1,173.3 billion.

Profit Growth

Core operating profit increased by JPY 53.9 billion or 45.5% year-on-year to reach JPY 172.2 billion.

ENHERTU Sales Growth

ENHERTU sales in the first 9 months of fiscal year '23 grew by JPY 136.3 billion year-on-year to JPY 276.0 billion.

Dividend Increase

Annual dividend forecast per share increased to JPY 50, up by JPY 20 from FY 2022.

Patent Dispute Settlement

Plexxikon received a lump sum payment of USD 182 million or JPY 26.1 billion from Novartis following a patent dispute settlement.

Lowlights

ENHERTU Sales Forecast Revision

U.S. ENHERTU sales forecast was slightly revised downward by JPY 3.2 billion from the October forecast.

Potential Financial Impact of Esperion Payments

The accounting treatment of payments related to Esperion is undecided, which may impact future financial results.

Delayed Data Availability

Top-line results for the DESTINY-Breast06 trial delayed to the first half of fiscal 2024.

Company Guidance

During the third-quarter earnings call for Daiichi Sankyo, several financial metrics and forecasts were discussed. The company reported a significant revenue increase of JPY 225 billion, or 23.7% year-on-year, reaching JPY 1,173.3 billion. This growth was driven by increased sales across various business units, including Japan, oncology, and EU specialty businesses. The core operating profit rose by JPY 53.9 billion, a 45.5% increase from the previous year, totaling JPY 172.2 billion. Meanwhile, operating profit, factoring in temporary gains and losses, surged by JPY 67.4 billion, marking a 53% year-on-year growth to JPY 194.6 billion. Notably, profit attributable to owners of the company saw an 88.7% rise, amounting to JPY 163.6 billion. The company revised its FY 2023 revenue forecast upward by JPY 30 billion to JPY 1,580 billion, attributing growth to favorable foreign exchange effects and increased sales of specific products. Additionally, the annual dividend forecast per share was increased to JPY 50, reflecting strong business performance and strategic collaborations.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.