Cawachi Limited (2664) AI Stock Analysis

• Market Cap: ¥66.76B
• Dividend Yield: 2.68%
• Average Volume (3M): 35.49K
• Price to Earnings (P/E): 16.6
• Beta (1Y): 0.36
• Revenue Growth: -0.56%
• EPS Growth: 5.59%
• Country: JP
• Employees: 2,722
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Pharmaceuticals
• EPS (TTM): 45.10
• Shares Outstanding: 24,583,420
• 10 Day Avg. Volume: 30,120
• 30 Day Avg. Volume: 35,490
• PEG Ratio: 3.54
• Price to Book (P/B): 0.55
• Price to Sales (P/S): 0.22
• P/FCF Ratio: 18.47
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: ¥3,341.00 ▲(10.45% Upside)
• Action: Reiterated Date: 08/21/25
• Date: Action: Reiterated 08/21/25

Cawachi Limited's strong financial position and reasonable valuation are the primary strengths, contributing to a solid overall score. The technical analysis indicates stability but lacks strong momentum, while the absence of earnings call and corporate events data limits additional insights.

Positive Factors

Strong balance sheet

Low leverage and a high equity ratio provide lasting financial flexibility, reducing refinancing and solvency risk. This positions the company to withstand industry shocks, fund store operations or selective investment, and support stable operations over the next several months.

Improving cash generation

A strong increase in free cash flow and an operating cash flow to net income ratio above 1 indicate improving cash quality and operating conversion. Durable cash generation enhances ability to fund capex, maintain dividends, and reduce reliance on external funding.

Revenue stability & cost control

Consistent top-line and steady gross margins reflect durable demand and effective procurement/expense management in retail pharmacy. Stable revenues and margin control support predictable cash flows and operational planning over a multi-month horizon.

Negative Factors

Low net profitability

Very thin net and operating margins mean limited buffer against cost inflation or sales weakness. Persistent low profitability constrains reinvestment, reduces retained earnings growth, and makes returns sensitive to small adverse changes in revenues or expenses.

Declining EPS growth

A steep year-over-year EPS decline signals earnings pressure that may reflect margin compression, one-offs, or lower volumes. If earnings recovery lags, it limits cash available for strategic initiatives and weakens long-term return prospects for shareholders.

Weak FCF conversion

Free cash flow converts only ~70% of reported net income, indicating cash generation lag versus accounting profits. This reduces the practical funds available for dividends, debt paydown, or reinvestment, constraining financial flexibility despite improving headline FCF.

Cawachi Limited Business Overview & Revenue Model

Company Description

Cawachi Limited manages drugstores in Japan. The company retails pharmaceuticals, health foods, childcare products, cosmetics, daily miscellaneous goods, general food products, confectionery products, etc. It also involved in the insurance business. The company operates 355 drugstores. Cawachi Limited was founded in 1967 and is headquartered in Oyama, Japan.

How the Company Makes Money

Cawachi Limited primarily makes money through retail sales at its drugstore locations. Its main revenue stream comes from selling (1) prescription-related and over-the-counter pharmaceutical products, (2) health and beauty products (e.g., personal care and cosmetics), and (3) everyday household and convenience goods (e.g., toiletries and other daily necessities). The company’s earnings are driven by customer traffic and repeat purchases across these categories, with revenue recognized at the point of sale through its store network. Specific details on revenue mix by category, private-label contribution, e-commerce contribution, supplier rebate/allowance structures, and named strategic partnerships are null.

Cawachi Limited Financial Statement Overview

Summary

Cawachi Limited demonstrates stable revenue growth and strong cost control, with a solid balance sheet indicating low leverage and high equity. However, profitability and cash flow efficiency need improvement.

Income Statement

Cawachi Limited's income statement shows a stable revenue growth with a 0.65% increase from the previous year. The gross profit margin is consistent at around 23.2%, indicating strong cost management and efficiency. However, the net profit margin is relatively low at approximately 1.7%, suggesting limited profitability. The EBIT margin is low at 2.6%, but the EBITDA margin is slightly better at 3.9%, showcasing some operational efficiency. Overall, the company demonstrates stable revenue growth and strong cost control, but profitability remains a concern.

Balance Sheet

The balance sheet of Cawachi Limited displays a solid financial structure with a debt-to-equity ratio of 0.15, indicating low leverage. The return on equity is stable at 4.3%, showing efficient use of equity to generate profits. The equity ratio is strong at 57.3%, reflecting financial stability and a low reliance on debt. Overall, the balance sheet indicates a strong financial position with low leverage and high equity.

Cash Flow

Cawachi Limited's cash flow statement shows a significant improvement in free cash flow, with a growth rate of 232.5% from the previous year. The operating cash flow to net income ratio is 1.53, demonstrating strong cash generation relative to net income. However, the free cash flow to net income ratio is lower at 0.70, indicating some challenges in converting income into free cash flow. The cash flow position is improving, but there remains room for better conversion of earnings to free cash flow.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	287.50B	287.82B	285.96B	281.87B	279.46B	284.49B
Gross Profit	66.44B	66.66B	65.80B	64.05B	63.15B	64.68B
EBITDA	10.85B	11.36B	11.49B	10.90B	12.16B	15.17B
Net Income	4.75B	4.88B	4.71B	4.18B	4.83B	7.11B
Balance Sheet
Total Assets	203.63B	200.96B	197.24B	195.24B	192.48B	194.86B
Cash, Cash Equivalents and Short-Term Investments	40.72B	36.67B	35.62B	38.45B	38.96B	41.23B
Total Debt	17.92B	16.60B	16.73B	19.55B	22.92B	26.41B
Total Liabilities	89.95B	86.55B	85.94B	87.51B	87.83B	94.00B
Stockholders Equity	113.68B	114.41B	111.30B	107.72B	104.65B	100.86B
Cash Flow
Free Cash Flow	0.00	3.40B	1.02B	4.11B	2.37B	12.09B
Operating Cash Flow	0.00	7.48B	6.40B	9.82B	6.87B	15.27B
Investing Cash Flow	0.00	-4.51B	-5.29B	-5.84B	-4.54B	-3.15B
Financing Cash Flow	0.00	-1.92B	-3.94B	-4.49B	-4.61B	-3.98B

Cawachi Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3025.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2664, the sentiment is Positive. The current price of 3025 is below the 20-day moving average (MA) of 3035.56, above the 50-day MA of 3006.48, and above the 200-day MA of 2844.47, indicating a neutral trend. The MACD of -15.18 indicates Positive momentum. The RSI at 47.90 is Neutral, neither overbought nor oversold. The STOCH value of 31.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2664.

Cawachi Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7649	75 Outperform	¥649.49B	23.29	15.71%	0.96%	21.81%	67.76%
2664	72 Outperform	¥66.76B	16.62	―	2.68%	-0.56%	5.59%
9989	69 Neutral	¥458.11B	14.05	11.37%	3.04%	6.32%	8.19%
3391	67 Neutral	¥1.05T	25.31	―	1.72%	―	―
3549	67 Neutral	¥351.10B	20.79	―	0.41%	15.81%	27.05%
3349	60 Neutral	¥527.83B	22.79	―	0.93%	3.73%	18.84%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Cawachi Limited Corporate Events

Cawachi Limited Posts Profit Decline but Boosts Anniversary Dividend Amid Stable Financial Base

Cawachi Limited reported consolidated net sales of ¥214.99 billion for the nine months ended December 15, 2025, down 0.9% year on year, with operating profit falling 20.0% to ¥4.62 billion and profit attributable to owners of parent declining 13.1% to ¥3.47 billion, reflecting margin pressures and a weaker earnings profile despite stable overall scale. The company’s financial position remained robust with total assets of ¥205.10 billion and an equity-to-asset ratio of 56.6%, and it plans to raise its full-year dividend to ¥100 per share, including a ¥20 commemorative payout for its 65th anniversary, even as it forecasts slightly lower full-year sales and a more than 20% drop in full-year profit, signaling a commitment to shareholder returns amid a challenging earnings environment.

The most recent analyst rating on (JP:2664) stock is a Buy with a Yen3441.00 price target. To see the full list of analyst forecasts on Cawachi Limited stock, see the JP:2664 Stock Forecast page.