Eisai Co’s Strategic Initiatives and Growth Justify Buy Rating Despite Leqembi Guidance Concerns

Miki Sogi, an analyst from Bernstein, maintained the Buy rating on Eisai Co (ESALF – Research Report). The associated price target was lowered to Yen5,900.00.

Miki Sogi has given his Buy rating due to a combination of factors including Eisai Co’s performance and strategic initiatives. Despite a disappointing guidance for Leqembi in FY25, the company’s overall topline for FY24 slightly exceeded expectations, showcasing a 6% year-over-year growth. The operating profit, although below consensus, still demonstrated an 11% increase from the previous year.
Additionally, Eisai’s strategic measures such as shifting Leqembi’s API manufacturing to the US and effective supply chain management are expected to mitigate potential tariff impacts. The company’s cost management efforts, including headcount reduction and prioritization of pipeline assets, are anticipated to balance out increased costs associated with Medicare Part D redesign. These factors, combined with the healthy growth of Lenvima, contribute to the positive outlook and justify the Buy rating.

ESALF’s price has also changed moderately for the past six months – from $32.237 to $26.000, which is a -19.35% drop .