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Morinaga & Co (JP:2201)
:2201
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Morinaga & Co
(OTC:2201)
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Select Model
Rating:76Outperform
Price Target:
¥2,924.00
▲(11.99% Upside)
Morinaga & Co's strong financial performance and attractive valuation are the primary drivers of its score. Technical indicators suggest neutral market momentum, which slightly tempers the overall outlook.
Positive Factors
Revenue Growth
Consistent revenue growth indicates expanding market reach and product adoption, which supports long-term business sustainability and competitiveness.
Margin Stability
Stable margins suggest effective cost control, enhancing profitability and allowing the company to reinvest in growth and innovation.
Balance Sheet Health
A strong balance sheet with low leverage provides financial flexibility and resilience, enabling the company to navigate economic fluctuations.
Negative Factors
Cash Flow Variability
Variability and decline in free cash flow can challenge liquidity management, potentially affecting the company's ability to fund operations and growth initiatives.
Equity Stability Concerns
Decreasing equity can signal underlying financial risks, potentially impacting investor confidence and the company's ability to raise capital.
Cash Flow Management Challenges
Challenges in converting income to free cash flow may limit the company's ability to invest in growth opportunities and manage financial obligations effectively.
Morinaga & Co (2201) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥215.74B
Dividend Yield3.53%
Average Volume (3M)297.39K
Price to Earnings (P/E)12.3
Beta (1Y)0.25
Revenue Growth4.21%
EPS Growth23.86%
CountryJP
Employees3,093
SectorConsumer Defensive
Sector Strength42
IndustryFood Confectioners
Share Statistics
EPS (TTM)71.20
Shares Outstanding86,111,640
10 Day Avg. Volume269,780
30 Day Avg. Volume297,393
Financial Highlights & Ratios
PEG Ratio0.59
Price to Book (P/B)1.69
Price to Sales (P/S)0.96
P/FCF Ratio-78.44
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)211.54
Revenue Forecast (FY)¥238.60B
Morinaga & Co Business Overview & Revenue Model
Company DescriptionMorinaga & Co., Ltd. is a leading Japanese confectionery company known for its innovative and high-quality products. Established in 1899, the company operates primarily in the food and beverage sector, specializing in a wide range of confectionery items, dairy products, and nutritional supplements. Morinaga is particularly famous for its iconic Milk Caramel candies, as well as its range of chocolate products, biscuits, and health-oriented snacks. The company also engages in the production of infant formula and other food products, catering to both domestic and international markets.
How the Company Makes MoneyMorinaga & Co. generates revenue through multiple streams, primarily by selling its confectionery and dairy products to consumers and businesses. The company benefits from a well-established distribution network, which includes supermarkets, convenience stores, and online platforms, allowing it to reach a wide audience. Key revenue streams include retail sales of its popular candy and snack products, as well as sales of its nutritional products, which cater to health-conscious consumers. Additionally, Morinaga has formed strategic partnerships with retailers and other food manufacturers to expand its market presence and enhance product availability. The company's focus on innovation and product development, along with its commitment to quality, further contributes to customer loyalty and sustained sales growth.
Morinaga & Co Earnings Call Summary
Earnings Call Date:Nov 12, 2024
(Q2-2024)
| % Change Since: |
Next Earnings Date:Feb 10, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant growth in net sales and strong performance in key segments like the U.S. business and Frozen Desserts. Strategic initiatives and successful market expansions are positive indicators for future growth. However, challenges such as increased costs, expected profit declines in H2, and pressure on profit margins due to raw material costs present notable challenges. The overall sentiment is cautiously optimistic with a recognition of areas requiring attention.Q2-2024 Updates
Positive Updates
Record-Breaking Net Sales and Growth
Net sales for Q2 reached JPY 109.6 billion, an increase of JPY 11.2 billion over the previous year, representing 111.4% of the previous year's sales. This was JPY 3.6 billion higher than the forecast announced 6 months prior.
U.S. Business Performance
Significant earnings contribution from the U.S. business with sales on a local currency basis reaching 130% of the previous year's level in H1 and a forecast of 127% for H2.
Strong Performance in Frozen Desserts
Frozen Desserts outperformed the market with a growth of 114.2% compared to the market's 111.8% from April to September. Ita Choco Ice shipments were 141% of the previous year's shipments.
Confectionery Segment Success
Morinaga Biscuits brand achieved record sales in September with a market growth of 124.4%, significantly higher than the overall market growth of 103.6%.
HI-CHEW Market Expansion
HI-CHEW achieved record total brand sales with a market growth of 129% compared to the year before the previous year. The rollout of HI-CHEW Day in August was well received.
Revised Positive Earnings Forecast
Revised net sales forecast for the fiscal year ending March 2024 is JPY 210 billion, an increase of JPY 15.7 billion over the previous year, with operating income expected to increase by JPY 3.5 billion.
Increase in Operating Margin
Operating income was JPY 14.1 billion, an increase of JPY 3.9 billion from the previous year, with an operating margin improvement of 2.5 percentage points to 12.9%.
Successful Strategic Initiatives
Company's strategic initiatives in DX, human resources, and advertising have contributed to the overall growth and are expected to continue supporting future business expansion.
Negative Updates
Operating Income Decline Expected in H2
Operating income for H2 of the consolidated total is expected to decrease compared to the previous year due to increased strategic investments and advertising expenses.
Impact of Raw Material Costs
Raw materials are expected to increase by about JPY 4.8 billion, impacting profitability, despite efforts to offset through price revisions.
Challenges in In Jelly and Direct Marketing
Shipments for in Jelly fell below the previous year's level at 99% in H1 due to last year's special demand impact. Direct Marketing requires significant additional advertising investment for future growth.
Profit Margin Pressure in Confectionery & Foodstuffs
The Confectionery & Foodstuffs business has been significantly affected by the soaring cost of raw materials, with a forecasted operating margin of 3.8%, up from 2% in the previous year but still under pressure.
Potential Cost of Unsold Stocks
The company anticipates incurring costs for the disposal of unsold stocks, contributing to the expected decrease in profitability in H2.
Company Guidance
In the earnings call for Q2 of the fiscal year ending March 2024, Eijiro Oota, the executive of 2201.T, reported impressive financial results, with net sales reaching JPY 109.6 billion, which is JPY 11.2 billion higher than the previous year and JPY 3.6 billion above the forecast. Operating income was JPY 14.1 billion, surpassing the previous year by JPY 3.9 billion and exceeding the forecast by JPY 2.2 billion, resulting in an operating margin of 12.9%. The U.S. business significantly contributed to earnings growth, amid a JPY 2.9 billion impact from increased raw materials and energy costs. The company forecasts net sales of JPY 210 billion for the fiscal year, indicating a JPY 15.7 billion increase from the previous year. Despite anticipating decreased profits in H2 due to increased strategic investments and advertising, the firm expects an operating income of JPY 18.7 billion and net income of JPY 13.6 billion, both surpassing previous year figures. Furthermore, the ratio of overseas sales to total sales is projected to exceed the midterm target, supported by strong growth in the U.S. market.Morinaga & Co Financial Statement Overview
Summary
Morinaga & Co shows strong revenue and profit growth with stable margins, indicating efficient cost management. The balance sheet is robust with low leverage, but cash flow variability presents liquidity challenges.Income Statement
Morinaga & Co has demonstrated strong revenue and profit growth over the years. The gross profit margin and net profit margin have remained stable, indicating efficient cost management. The revenue growth rate from 2024 to 2025 was approximately 7.3%, showing a positive upward trajectory. EBIT and EBITDA margins are solid, supporting profitability.85
Very Positive
Balance Sheet
The company's balance sheet is robust with a low debt-to-equity ratio, reflecting prudent financial leverage. Return on Equity (ROE) shows a healthy return for shareholders. However, there is a slight decrease in stockholders' equity from 2024 to 2025, which may indicate potential risks in equity stability.78
Positive
Cash Flow
Morinaga & Co's cash flow statement shows variability in free cash flow, with a significant decline in the recent year, turning negative. Despite this, the operating cash flow to net income ratio remains positive, suggesting operational efficiency. The free cash flow to net income ratio signals potential challenges in liquidity management.72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 232.28B | 228.96B | 213.37B | 194.37B | 181.25B | 199.99B |
| Gross Profit | 91.37B | 90.02B | 86.69B | 76.65B | 75.83B | 105.65B |
| EBITDA | 34.63B | 34.32B | 30.17B | 24.13B | 49.38B | 27.04B |
| Net Income | 17.88B | 17.71B | 15.15B | 10.06B | 27.77B | 13.42B |
Balance Sheet | ||||||
| Total Assets | 209.25B | 209.99B | 223.64B | 205.23B | 214.30B | 201.91B |
| Cash, Cash Equivalents and Short-Term Investments | 24.43B | 31.06B | 49.90B | 36.36B | 56.65B | 31.57B |
| Total Debt | 24.00B | 20.19B | 20.32B | 20.44B | 10.98B | 10.92B |
| Total Liabilities | 83.48B | 77.59B | 90.99B | 79.37B | 83.13B | 78.00B |
| Stockholders Equity | 124.16B | 130.87B | 131.20B | 124.56B | 130.03B | 123.00B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | -2.82B | 19.70B | -16.55B | 9.50B | -7.75B |
| Operating Cash Flow | 0.00 | 10.76B | 30.17B | -2.97B | 24.82B | 12.13B |
| Investing Cash Flow | 0.00 | -9.84B | -5.34B | -14.21B | 9.31B | -19.86B |
| Financing Cash Flow | 0.00 | -18.01B | -14.07B | -7.35B | -5.94B | -4.08B |
Morinaga & Co Technical Analysis
Negative
2611.00
Price Trends
2635.47
Negative
2576.15
Positive
2497.72
Positive
Market Momentum
2.69
Positive
45.56
Neutral
30.12
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2201, the sentiment is Negative. The current price of 2611 is below the 20-day moving average (MA) of 2659.05, below the 50-day MA of 2635.47, and above the 200-day MA of 2497.72, indicating a neutral trend. The MACD of 2.69 indicates Positive momentum. The RSI at 45.56 is Neutral, neither overbought nor oversold. The STOCH value of 30.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:2201.
Morinaga & Co Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | ¥215.74B | 12.30 | 13.33% | 3.53% | 4.21% | 23.86% | |
71 Outperform | ¥66.37B | 34.73 | ― | 1.14% | 8.17% | 10.65% | |
68 Neutral | ¥57.47B | 11.61 | ― | 1.57% | 5.78% | 14.23% | |
68 Neutral | ¥64.34B | 18.16 | ― | 4.91% | 7.74% | 0.96% | |
68 Neutral | ¥32.51B | 25.93 | ― | 1.33% | 0.24% | -25.90% | |
66 Neutral | ¥34.62B | 15.10 | ― | 0.83% | 15.03% | -26.43% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% |
* Consumer Defensive Sector Average
JP:2201
Morinaga & Co
2,612.50
-82.07
-3.05%
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Morinaga & Co Corporate Events
Morinaga & Co. Reports Mixed Financial Results for Q1 2025
Aug 7, 2025
Morinaga & Co. reported a 5.8% increase in net sales for the three months ending June 30, 2025, compared to the same period last year. However, comprehensive income saw a significant decline of 52.5%. The company forecasts a modest increase in net sales for the fiscal year ending March 31, 2026, but anticipates a decrease in operating and ordinary income. This financial performance indicates a challenging environment, potentially impacting stakeholder confidence and requiring strategic adjustments to maintain growth.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.