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Takeda Pharmaceutical Co
(4502)
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Rating:64Neutral
Price Target:
¥5,787.00
▲(2.46% Upside)
Action:Reiterated
Date:08/04/26
The score is driven primarily by stable fundamentals and cash generation (with improving leverage), supported by generally positive technical momentum and a guidance-maintaining earnings call with meaningful pipeline/launch milestones. The largest offset is valuation, with a very high P/E despite only modest bottom-line profitability and low ROE.
Positive Factors
Strong cash generation and improving leverage
Takeda's sizable trailing‑twelve‑month operating cash flow (~¥895B) and FCF (~¥700B) provide durable internal funding for R&D, launches and transformation without heavy reliance on external financing. Improved debt/equity (~0.65) lowers refinancing risk and supports multi‑period investment and dividend flexibility.
Negative Factors
Thin net margins and low ROE
Despite healthy gross and operating margins, low net margin (~3.9%) and ROE (~2.4%) show limited bottom‑line conversion and weak returns on capital. Persistent below‑the‑line pressures, taxes, or one‑offs may constrain durable profitability and shareholder value creation absent structural improvement in ROE drivers.
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Positive Factors
Negative Factors
Strong cash generation and improving leverage
Takeda's sizable trailing‑twelve‑month operating cash flow (~¥895B) and FCF (~¥700B) provide durable internal funding for R&D, launches and transformation without heavy reliance on external financing. Improved debt/equity (~0.65) lowers refinancing risk and supports multi‑period investment and dividend flexibility.
Read all positive factors
Takeda Pharmaceutical Co (4502) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥8.80T
Dividend Yield3.63%
Average Volume (3M)4.35M
Price to Earnings (P/E)129.5
Beta (1Y)0.38
Revenue Growth3.10%
EPS Growth-218.63%
CountryJP
Employees47,029
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)114.22
Shares Outstanding1,602,047,600
10 Day Avg. Volume4,483,280
30 Day Avg. Volume4,345,693
Financial Highlights & Ratios
PEG Ratio0.60
Price to Book (P/B)1.15
Price to Sales (P/S)1.98
P/FCF Ratio11.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥6,500.00Price Target Upside15.08% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)123.29
Revenue Forecast (FY)¥4.67T
Takeda Pharmaceutical Co Business Overview & Revenue Model
Company Description
Takeda Pharmaceutical Company Limited is a global biopharmaceutical enterprise engaged in the discovery, development, manufacturing, marketing, and out-licensing of various medical products. The company's operations span Japan, the United States, ...
How the Company Makes Money
Takeda primarily makes money by selling prescription medicines and vaccines to wholesalers, hospitals, pharmacies, governments, and other healthcare providers across major geographies (including Japan and international markets). Its core revenue s...
Takeda Pharmaceutical Co Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call presented a mix of modest near-term CER declines and cash-flow timing effects against substantial positive developments: strong FX-driven reported results, confirmation of transformation-led funding for launches, multiple imminent regulatory and commercial milestones (ORZEYFUL approval in China; rusfertide priority review; superior zasocitinib data), and a robust late-stage pipeline with several programs moving to pivotal stages. While Q1 contained some one-time impacts, transitional investment effects and product-specific headwinds, the combination of pipeline momentum, launch readiness and a maintained full-year financial outlook suggests the company is positioned to convert R&D progress into revenue growth later in the year.Positive Updates
Top-Line Growth at Actual FX
Reported revenue JPY 1.22 trillion, up 10.2% on an actual FX basis (but -0.5% at constant exchange rates (CER)); FX tailwind added JPY 118.2 billion to revenue.
Negative Updates
Underlying Revenue and Profit Slightly Negative at CER
At constant exchange rates, core revenue declined 0.5% year-over-year and core operating profit also declined 0.5% at CER, driven by investment behind upcoming launches and headwinds from mature products.
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Q1-2026 Updates
Positive
Negative
Top-Line Growth at Actual FX
Reported revenue JPY 1.22 trillion, up 10.2% on an actual FX basis (but -0.5% at constant exchange rates (CER)); FX tailwind added JPY 118.2 billion to revenue.
Read all positive updates
Company Guidance
Takeda said Q1 results keep them on track for unchanged FY‑26 guidance, reporting revenue of JPY 1.22 trillion (+10.2% at actual FX, -0.5% at CER), core operating profit JPY 358.9 billion (+11.5% actual FX, -0.5% CER), reported operating profit JPY 201.4 billion, core EPS JPY 154 (‑11.8% CER) and reported EPS JPY 72, while FX added JPY 118.2 billion to the top line; they reaffirm full‑year adjusted free cash flow of JPY 650–750 billion, maintain a ~65% gross margin outlook, and target improving ROE to above 5% as they fund growth investments (including a USD 200 million payment to Protagonist) with transformation savings — operationally core in‑line brands (58% of revenue) grew 2.3% CER, new launches (4% of revenue) grew 22.6% CER, ENTYVIO grew ~4% CER, and the company expects US and Japan launches of ORZEYFUL and rusfertide in H2 2026 (rusfertide PDUFA in August) and zasocitinib in H1 2027.Takeda Pharmaceutical Co Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
66
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.62T | 4.51T | 4.58T | 4.26T | 4.03T | 3.57T |
| Gross Profit | 2.87T | 2.30T | 2.46T | 2.32T | 2.30T | 2.04T |
| EBITDA | 1.26T | 1.34T | 1.13T | 927.95B | 1.18T | 1.04T |
| Net Income | 180.72B | 191.76B | 107.93B | 144.07B | 317.02B | 230.06B |
Balance Sheet | ||||||
| Total Assets | 15.66T | 15.45T | 14.25T | 15.11T | 13.96T | 13.18T |
| Cash, Cash Equivalents and Short-Term Investments | 527.58B | 595.05B | 385.11B | 457.80B | 533.53B | 849.70B |
| Total Debt | 4.94T | 4.88T | 5.09T | 5.46T | 4.86T | 4.81T |
| Total Liabilities | 8.10T | 7.68T | 7.31T | 7.83T | 7.60T | 7.49T |
| Stockholders Equity | 7.56T | 7.77T | 6.94T | 7.27T | 6.35T | 5.68T |
Cash Flow | ||||||
| Free Cash Flow | 700.26B | 762.71B | 761.70B | 464.90B | 736.56B | 897.97B |
| Operating Cash Flow | 894.89B | 938.71B | 962.49B | 640.32B | 877.22B | 1.02T |
| Investing Cash Flow | -434.00B | -387.80B | -385.36B | -488.21B | -615.72B | -204.44B |
| Financing Cash Flow | -393.18B | -375.44B | -638.44B | -254.04B | -600.59B | -962.06B |
Takeda Pharmaceutical Co Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | ¥229.00B | 7.71 | ― | 2.12% | 6.58% | -8.75% | |
73 Outperform | ¥2.56T | 12.06 | 13.65% | 2.45% | 14.01% | 20.33% | |
71 Outperform | ¥1.36T | 35.31 | 4.44% | 3.44% | 4.56% | -16.55% | |
68 Neutral | ¥559.84B | 4.46 | 41.78% | ― | 14.09% | 488.06% | |
64 Neutral | ¥8.80T | 129.50 | 2.61% | 3.54% | 3.10% | -218.63% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
JP:4502
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Takeda Pharmaceutical Co Corporate Events
Takeda Delivers Strong Q1 Revenue Growth But Flags Core EPS Decline
Jul 30, 2026
Takeda reported revenue of ¥1,219.9 billion for the three months ended June 30, 2026, up 10.2% year on year, with operating profit rising 9.1% and core operating profit increasing 11.5%. Net profit attributable to owners fell 8.9% to ¥11...
Takeda Finalizes Share Issuance for Global Employee Incentive Plan
Jul 8, 2026
Takeda has completed the issuance of new shares and disposal of treasury shares tied to its long-term incentive plan for group employees outside Japan, finalizing the transaction on July 8, 2026. The move supports global employee compensation and ...
Takeda Names Julie Kim CEO and Strengthens Board for Next Growth Phase
Jun 24, 2026
Takeda has completed its 18‑month CEO transition by appointing Julie Kim as representative director, president and CEO following shareholder approval, marking the retirement of long‑time chief Christophe Weber. Kim, who joined via the ...
Takeda to Issue Shares for Global Employee Long-Term Incentive Plan
Jun 9, 2026
Takeda Pharmaceutical will issue 10,892,917 new shares and dispose of 6,096,159 treasury shares, totaling 16,989,076 ordinary shares, to fund its Long-Term Incentive Plan for 10,557 employees outside Japan. Priced at ¥5,050 per share, matchin...
Takeda Books ¥402.5bn Legal Provision but Keeps FY2026 Outlook Intact
Jun 5, 2026
Takeda has revised its consolidated earnings report for the fiscal year ended March 31, 2026 to reflect the financial impact of a U.S. jury verdict in antitrust litigation related to AMITIZA (lubiprostone). The company updated and resubmitted its ...
Takeda Files New Japan Shelf Registration to Support Long-Term Incentive Plan
Jun 1, 2026
Takeda Pharmaceutical plans to withdraw a previous shelf registration for new shares filed in June 2025 and submit a new shelf registration in Japan to allow timely issuance of new common stock or disposal of treasury shares tied to its Long Term ...
Takeda faces major AMITIZA antitrust verdict and prepares FY2025 provision
May 19, 2026
Takeda said a Massachusetts jury returned a verdict against the company in U.S. antitrust litigation over the constipation drug AMITIZA, awarding nearly USD 885 million in single damages to wholesalers, retailers and end payors, with certain porti...
Takeda Extends Long-Term Stock Incentive Plans for Directors and Management into 2026
May 13, 2026
Takeda’s board has approved the continuation in 2026 of its stock compensation plan for directors and the stock grant system for Japan-based company management, both designed as long-term incentive schemes. The framework distinguishes betwee...
Takeda Lifts Profit and Dividend Despite Revenue Dip, Signals Softer Earnings Ahead
May 13, 2026
Takeda reported fiscal year 2026 revenue of ¥4.51 trillion, down 1.7% year on year, but operating profit rose 19.3% to ¥408.8 billion and net profit attributable to owners surged 77.7% to ¥191.8 billion, supported by stronger margin...
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.