In a report released on December 10, Takashi Miyazaki from Goldman Sachs downgraded CALBEE to a Sell, with a price target of Yen2,750.00.
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Takashi Miyazaki has given his Sell rating due to a combination of factors impacting Calbee’s financial outlook. Despite a recent 13% reduction in full-year operating profit guidance, the company’s stock price has shown resilience, slightly increasing since the announcement. This stability is partly due to anticipated financial strategies, such as improved shareholder returns, being factored into the stock price. However, Miyazaki sees limited upside potential with a new target price reflecting a 5% downside, compared to an average 12% upside for similar stocks in their coverage.
Additionally, there are concerns about Calbee potentially missing its operating profit guidance for FY3/26 and the likelihood of future downward revisions to consensus estimates. Miyazaki’s forecast for FY3/27 operating profit is notably below the consensus, indicating a more cautious outlook. Furthermore, external factors such as a poor potato harvest and quality issues could exacerbate these challenges, leading to a more significant impact on the company’s performance than currently anticipated.