Ajinomoto Co (2802) AI Stock Analysis

• Market Cap: $3.00T
• Dividend Yield: 1.26%
• Average Volume (3M): 2.52M
• Price to Earnings (P/E): 33.1
• Beta (1Y): 0.75
• Revenue Growth: 8.76%
• EPS Growth: -0.23%
• Country: JP
• Employees: 34,862
• Sector: Consumer Defensive
• Sector Strength: 82
• Industry: Packaged Foods
• EPS (TTM): -11.77
• Shares Outstanding: 1,005,637,630
• 10 Day Avg. Volume: 2,260,150
• 30 Day Avg. Volume: 2,522,179
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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: $6,032.04
• Price Target Upside: 86.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Ajinomoto Co's overall stock score reflects strong financial performance with excellent profitability and solid cash flow generation. The company's technical indicators suggest mixed momentum, with a high P/E ratio indicating a premium valuation. The latest earnings call highlights record sales but also notes challenges in certain segments and the potential short-term impact of the Forge Biologics acquisition. This combination of strengths and challenges results in a moderate overall stock score.

Positive Factors

Financial Performance

Ajinomoto posted an extremely strong Q2 with Business Profit +30%, driven primarily by ABF with revenues +33% in the period.

Growth Outlook

The Healthcare & Others segment, particularly Functional Materials, is expected to remain the primary growth driver, sustaining double-digit top- and bottom-line growth into the future, fueled by AI-driven demand.

Shareholder Returns

The company announced a series of shareholder-friendly corporate actions, including an increase in the FY24F dividend, a share buyback, and a 2 for 1 stock split, likely providing support to the share price.

Negative Factors

Currency Risk

A key risk is JPY movement; a strengthening of JPY could lead to underperformance and vice versa.

Industry Risk

A key downside risk will be an industry-wide cutback on AI capex spend, which will hamper the growth of its functional materials segment, a major growth driver.

Operational Challenges

Ajinomoto has announced another round of layoffs in their North America Frozen Food business, signaling that the restructuring agenda continues unabated, despite the abrupt change of Global CEO last month.

Ajinomoto Co Business Overview & Revenue Model

Company Description

Ajinomoto Co., Inc. is a Japanese multinational corporation specializing in food and biotechnology products. Founded in 1909 and headquartered in Tokyo, Japan, the company operates in several sectors, including food, amino acids, and pharmaceuticals. Ajinomoto is renowned for its production of seasonings, cooking oils, frozen foods, sweeteners, and amino acids, which are distributed globally. The company is committed to innovation in food and health, focusing on enhancing the quality of life through its diverse range of products and solutions.

How the Company Makes Money

Ajinomoto Co. makes money primarily through its diverse portfolio of products in the food and biotechnology sectors. The company's revenue streams are largely driven by the sale of seasonings, processed foods, frozen foods, and beverages, which cater to both consumer and commercial markets. Additionally, Ajinomoto generates income from its amino acids and pharmaceuticals segments, supplying ingredients for food products, dietary supplements, and medical applications. The company also engages in strategic partnerships and collaborations to expand its market reach and enhance its product offerings. Key factors contributing to its earnings include a robust distribution network, a strong brand presence, and ongoing investments in research and development to innovate and improve its product lines.

Ajinomoto Co Financial Statement Overview

Summary

Ajinomoto Co presents a strong financial profile with excellent profitability, efficient operations, and robust cash generation. The company is growing steadily with a solid capital structure. While there is moderate leverage, the firm manages its financials well, reflecting stability and potential for sustainable growth in the packaged foods industry.

Income Statement

Ajinomoto Co demonstrates strong profitability and growth. The TTM (Trailing-Twelve-Months) gross profit margin is approximately 36.05%, and the net profit margin stands at 6.04%. Revenue growth is robust at 5.80% from the previous year. EBIT margin is healthy at 10.65%, and EBITDA margin is 16.15%, indicating efficient operational management. Overall, the company shows solid revenue growth and profitability.

Balance Sheet

The balance sheet reflects a sound financial position, with a debt-to-equity ratio of 0.66, which is manageable. The return on equity (ROE) is 11.33%, showing efficient use of equity capital. The equity ratio is 43.71%, suggesting a stable capital structure with a decent proportion of equity financing. While leverage is moderate, the company maintains a healthy equity base.

Cash Flow

Cash flow analysis reveals strong financial health. The free cash flow growth rate is impressive at 33.49%, and the operating cash flow to net income ratio is 2.33, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 1.39, reflecting efficient cash management. Overall, cash flow metrics indicate robust cash generation and management.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
1.44T	1.36T	1.15T	1.07T	1.10T
	Gross Profit
511.45B	470.39B	425.90B	406.22B	403.87B
	EBIT
146.68B	148.93B	124.57B	101.12B	48.77B
	EBITDA
232.75B	226.85B	197.67B	168.07B	118.79B
	Net Income Common Stockholders
87.12B	94.06B	75.72B	59.42B	18.84B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
194.19B	145.09B	169.26B	193.69B	150.65B
	Total Assets
1.77T	1.51T	1.46T	1.43T	1.35T
	Total Debt
442.49B	288.56B	313.91B	350.42B	356.91B
	Net Debt
270.96B	155.79B	162.45B	168.81B	215.21B
	Total Liabilities
890.43B	688.77B	717.32B	763.44B	761.55B
	Stockholders Equity
814.69B	768.68B	686.91B	620.26B	538.98B
Cash Flow		Free Cash Flow
96.05B	44.59B	64.86B	79.61B	32.81B
	Operating Cash Flow
168.07B	117.64B	145.58B	165.65B	114.86B
	Investing Cash Flow
-132.43B	-30.09B	-61.57B	-66.25B	-66.65B
	Financing Cash Flow
-6.75B	-111.06B	-123.06B	-60.39B	-52.31B

Ajinomoto Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3238.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2802, the sentiment is Positive. The current price of 3238 is above the 20-day moving average (MA) of 2934.25, above the 50-day MA of 2965.59, and above the 200-day MA of 2963.64, indicating a bullish trend. The MACD of 31.68 indicates Negative momentum. The RSI at 69.32 is Neutral, neither overbought nor oversold. The STOCH value of 83.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2802.

Ajinomoto Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2502	77 Outperform	¥3.04T	15.77	7.35%	2.27%	6.15%	17.37%
2269	76 Outperform	$972.55B	19.67	6.71%	2.68%	4.60%	-25.15%
2801	74 Outperform	¥1.35T	21.53	12.17%	1.70%	7.29%	9.77%
2802	74 Outperform	$3.00T	33.08	8.89%	1.26%	8.76%	-0.23%
2914	72 Outperform	$7.97T	44.46	4.55%	4.03%	10.98%	-63.74%
Sector *	64 Neutral	$8.81B	14.72	5.05%	174.27%	3.55%	3.81%
2503	64 Neutral	$1.74T	29.87	4.95%	3.58%	9.56%	-48.35%

Ajinomoto Co Corporate Events

Ajinomoto Revises Earnings Forecast Following Subsidiary Sale

Ajinomoto Co., Inc. has revised its full-year consolidated performance forecast for the fiscal year ending March 31, 2025, due to an impairment loss related to its subsidiary, Ajinomoto Althea, Inc. The company has sold its shares in Althea to Packaging Coordinators Inc., leading to a downward revision of profit attributable to owners by ¥20.1 billion. This strategic move is expected to impact Ajinomoto’s financial results, with extraordinary losses recorded in its non-consolidated performance estimates due to the valuation of stocks of subsidiaries and affiliates.

Ajinomoto Co. Sells Subsidiary Althea to PCI in Strategic Realignment

Ajinomoto Co., Inc. has decided to sell its subsidiary, Ajinomoto Althea, Inc., to Packaging Coordinators Inc. (PCI) as part of its strategic realignment. This move aligns with Ajinomoto’s Medium-Term ASV Initiatives 2030 Roadmap, focusing on high-growth areas and leveraging proprietary technologies to enhance profitability in the healthcare sector.