Lacto Japan Co., Ltd. (3139) AI Stock Analysis

• Market Cap: ¥35.19B
• Dividend Yield: 3.84%
• Average Volume (3M): 80.31K
• Price to Earnings (P/E): 8.1
• Beta (1Y): 0.46
• Revenue Growth: 6.49%
• EPS Growth: 31.81%
• Country: JP
• Employees: 398
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 75.96
• Shares Outstanding: 10,021,600
• 10 Day Avg. Volume: 173,880
• 30 Day Avg. Volume: 80,306
• PEG Ratio: 0.22
• Price to Book (P/B): 1.07
• Price to Sales (P/S): 0.19
• P/FCF Ratio: -26.00
• 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: 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: 59 Neutral
• Price Target: ¥3,574.00 ▲(3.44% Upside)

The score is held back primarily by weak cash flow (negative operating and free cash flow recently) and meaningful leverage, despite strong revenue growth and improved profitability. Technical signals are also bearish with the stock trading below major moving averages. Offsetting these risks, the low P/E and healthy dividend yield improve the overall attractiveness.

Positive Factors

Strong revenue growth

A large, durable revenue step-up indicates strong product demand and successful distribution scaling. Sustained top-line growth supports margin leverage, capacity investments and brand expansion in Japan and nearby export markets, enabling longer-term earnings improvement if execution continues.

Improving profitability and ROE

Rising net margins and stronger ROE show the business is improving operational efficiency and capital allocation. If those trends persist, they enhance the firm's ability to fund growth, pay dividends and absorb shocks, strengthening long-term shareholder returns independent of short-term stock moves.

Stable supplier partnerships

Integrated relationships with local farmers secure raw-material continuity and quality—critical in dairy. This structural supply alignment lowers procurement risk, supports private-label and branded volume commitments, and enables consistent production and product innovation over the medium term.

Negative Factors

Weak cash generation

Recent negative operating and free cash flow reduces internal funding for working capital and capex, increasing reliance on external financing. Over months this constrains flexibility, raises refinancing risk and may force trade-offs between growth investment and liquidity preservation if cash conversion doesn't recover.

Meaningful leverage

Debt-to-equity above 1x materially limits financial flexibility given the firm's volatile cash flows and thin margins. Higher leverage increases interest burdens and reduces the ability to absorb raw-material or demand shocks, making capital structure a persistent vulnerability until leverage falls.

Structurally thin margins

Very low gross and net margins leave earnings highly exposed to milk input costs, pricing competition, and logistics inflation. Without sustained margin expansion or product mix improvement, profitability gains are fragile and can be eroded quickly by commodity or distribution cost moves over the medium term.

Lacto Japan Co., Ltd. Business Overview & Revenue Model

Company Description

Lacto Japan Co., Ltd. engages in sourcing and selling dairy ingredients, cheese products, processed meat, and other products in Japan and internationally. The company's products include full cream milk powder, skimmed milk powder, butter, cream, whey powder, whey protein concentrate, casein, caseinate, ice cream, and lactose products; and cheeses, prepared milk powder mixtures, prepared butter mixtures, and other prepared dairy mixtures, as well as liquor, processed eggs, processed meat products, and fresh meat products. It is also involved in the trade of agricultural and livestock products, processed products, food additives, food processing machinery, pharmaceuticals, quasi-pharmaceuticals, beverages, and food products; and provision of agency, brokerage, and consultant services, as well as insurance agency services. The company serves food manufacturers, wholesalers, and retailers. Lacto Japan Co., Ltd. was founded in 1998 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Lacto Japan generates revenue primarily through the sale of its dairy products to both retail and wholesale markets. Key revenue streams include direct sales to supermarkets, convenience stores, and food service providers. The company also profits from branded product lines that appeal to health-conscious consumers, as well as private label products for various retailers. Significant partnerships with local farmers and suppliers ensure a steady supply of raw materials, while collaborations with health and wellness organizations enhance its product offerings and market reach. Additionally, the company invests in marketing and promotional campaigns to drive consumer awareness and loyalty, contributing further to its revenue growth.

Lacto Japan Co., Ltd. Financial Statement Overview

Summary

Income statement shows strong revenue growth and improved profitability (2025 revenue up ~64.7%, net margin ~2.36% vs ~1.29% in 2023), but margins remain thin and cash generation is a major concern (operating cash flow slightly negative in 2025 and free cash flow negative in 2024–2025). Balance sheet leverage is meaningful with debt-to-equity above 1x (~1.13 in 2025), reducing flexibility if cash weakness persists.

Income Statement

Revenue has scaled strongly over time, including a sharp step-up in the latest year (2025 annual revenue growth ~64.7% after steady growth in prior years). Profitability also improved in 2025 versus 2023–2024, with operating and net margins rising (net margin ~2.36% in 2025 vs ~1.29% in 2023). Offsetting this, margins remain structurally thin for the business (gross margin ~6.7% and net margin ~2.4% in 2025), leaving earnings more sensitive to input costs and pricing pressure.

Balance Sheet

Leverage is meaningful and has trended higher versus earlier years: debt-to-equity is above 1.0 in 2023–2025 (about 1.13 in 2025), which reduces flexibility if cash generation weakens. That said, equity has grown and returns on equity are solid and improving (about 13.3% in 2025 vs ~11.4% in 2024), indicating the company is still producing reasonable shareholder returns despite higher leverage.

Cash Flow

Cash generation is the key weak spot. Operating cash flow has been volatile and turned slightly negative in 2025 (about -¥0.27B), and free cash flow was also negative in 2024–2025 (about -¥1.34B in 2025). While the company produced strong positive free cash flow in 2020 and 2023, the recent swing back to cash outflows suggests working-capital or investment demands are pressuring liquidity and increases reliance on financing despite improving reported earnings.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	181.64B	182.82B	170.91B	158.33B	147.42B	110.88B
Gross Profit	11.49B	12.29B	10.07B	7.91B	7.46B	6.64B
EBITDA	6.73B	6.79B	5.05B	3.45B	3.64B	3.11B
Net Income	4.29B	4.32B	3.15B	2.05B	2.29B	1.96B
Balance Sheet
Total Assets	92.90B	90.21B	81.44B	72.04B	73.46B	52.90B
Cash, Cash Equivalents and Short-Term Investments	10.36B	10.16B	9.08B	7.78B	6.38B	5.51B
Total Debt	43.20B	36.60B	32.92B	30.91B	30.87B	19.29B
Total Liabilities	63.47B	57.76B	53.85B	47.31B	50.98B	33.32B
Stockholders Equity	29.43B	32.45B	27.58B	24.72B	22.48B	19.58B
Cash Flow
Free Cash Flow	0.00	-1.34B	-185.00M	2.06B	-10.57B	-4.22B
Operating Cash Flow	0.00	-268.00M	636.00M	3.22B	-10.41B	-4.04B
Investing Cash Flow	0.00	-1.51B	-596.00M	-1.36B	-287.22M	-291.56M
Financing Cash Flow	0.00	2.43B	1.10B	-772.20M	11.08B	4.66B

Lacto Japan Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3455.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3139, the sentiment is Positive. The current price of 3455 is below the 20-day moving average (MA) of 3496.00, below the 50-day MA of 3478.05, and below the 200-day MA of 3624.11, indicating a neutral trend. The MACD of 8.54 indicates Negative momentum. The RSI at 54.87 is Neutral, neither overbought nor oversold. The STOCH value of 45.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3139.

Lacto Japan Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2612	77 Outperform	¥36.90B	13.95	―	2.55%	8.21%	20.27%
2669	73 Outperform	¥34.09B	23.54	―	1.10%	-1.72%	-19.25%
2820	66 Neutral	¥33.90B	20.66	―	1.56%	10.89%	25.32%
2831	64 Neutral	¥31.86B	12.80	―	1.96%	0.16%	10.88%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
2923	62 Neutral	¥37.37B	11.93	―	0.80%	8.19%	42.84%
3139	59 Neutral	¥35.19B	8.14	―	3.84%	6.49%	31.81%

Lacto Japan Co., Ltd. Corporate Events

Lacto Japan to Relocate Tokyo Head Office to Support Business Expansion and Staff Growth

Lacto Japan has announced the relocation of its head office to the 19th floor of the Toda Building in Kyobashi, Chuo-ku, Tokyo, effective March 30, 2026, while keeping its registered head office district unchanged. The move is driven by anticipated staff increases linked to future business expansion and is designed around an open-plan office to improve interdepartmental communication, boost employee engagement, and underpin sustainable corporate growth; relocation costs have already been incorporated into the company’s consolidated earnings forecast for the fiscal year ending November 2026, indicating limited incremental impact on near-term financial performance.

The most recent analyst rating on (JP:3139) stock is a Hold with a Yen3696.00 price target. To see the full list of analyst forecasts on Lacto Japan Co., Ltd. stock, see the JP:3139 Stock Forecast page.

Lacto Japan Launches “NEXT-LJ 2028” Mid-Term Plan to Build Growth Foundation and Expand Global Food Business

Lacto Japan has unveiled a new three-year mid-term management plan, “NEXT-LJ 2028,” starting in fiscal 2026, positioning the period as a foundation-building phase ahead of its 30th anniversary. Under the vision of “Building the foundations for Growth” and the concept of three “tsu-na-gu (to connect)” promises—linking food and health, value, and aspirations—the company will focus on growth areas, capital efficiency, global talent, and sustainability while enhancing its role as a diversified food company. Domestically, it plans to concentrate on growth sectors and supply chain resilience, while overseas it will accelerate expansion through deeper market penetration and a new factory, seeking to strengthen financial health and maximize shareholder value. The plan sets financial targets of increasing consolidated net sales from ¥182.8 billion in FY11/2025 to ¥210.0 billion in FY11/2028 and raising consolidated ordinary profit from ¥5.79 billion to ¥6.00 billion over the same period, indicating a strategy of steady top-line growth and improved profitability after an expected temporary earnings dip in FY11/2026.

The most recent analyst rating on (JP:3139) stock is a Hold with a Yen3696.00 price target. To see the full list of analyst forecasts on Lacto Japan Co., Ltd. stock, see the JP:3139 Stock Forecast page.

Lacto Japan Delivers Profit Surge and Higher Dividends but Guides to Lower Earnings for 2026

Lacto Japan reported strong results for the fiscal year ended November 30, 2025, with net sales rising 7.0% year on year to ¥182.8 billion and operating profit jumping 33.5% to ¥5.95 billion, driving a 37.2% increase in profit attributable to owners of parent to ¥4.32 billion and improvements in profitability indicators such as return on equity and operating margin. The company strengthened its financial position as total assets climbed to ¥90.2 billion and the equity ratio improved to 35.9%, while it significantly increased its annual dividend from ¥80 to ¥132 per share and plans to maintain that level in fiscal 2026, even as its forecast calls for modest sales growth to ¥193.0 billion but a decline in ordinary profit and net income, signaling a more cautious earnings outlook despite ongoing emphasis on shareholder returns.

The most recent analyst rating on (JP:3139) stock is a Hold with a Yen3696.00 price target. To see the full list of analyst forecasts on Lacto Japan Co., Ltd. stock, see the JP:3139 Stock Forecast page.