Sumitomo Dainippon Pharma Co (4506) AI Stock Analysis

• Market Cap: $962.05B
• Dividend Yield: N/A
• Average Volume (3M): 5.45M
• Price to Earnings (P/E): 8.7
• Beta (1Y): 0.95
• Revenue Growth: 29.92%
• EPS Growth: N/A
• Country: JP
• Employees: 4,980
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 22.19
• Shares Outstanding: 397,900,150
• 10 Day Avg. Volume: 5,265,230
• 30 Day Avg. Volume: 5,454,233
• PEG Ratio: -0.11
• Price to Book (P/B): 1.71
• Price to Sales (P/S): 0.73
• P/FCF Ratio: 83.47
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 2.57
• Enterprise Value/Gross Profit: 4.33
• Enterprise Value/Ebitda: 8.49
• 1Y Price Target: $2,679.46
• Price Target Upside: 10.65% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 261.68
• Revenue Forecast (FY): $445.09B

• Rating: 62 Neutral
• Price Target: ¥2,675.00 ▲(10.47% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by improving financial performance with strong current profitability and positive free cash flow, but held back by significant recent volatility and uneven cash conversion. Technicals are supportive with strong trend strength, though overbought signals add near-term risk. Valuation is a modest positive due to the low P/E.

Positive Factors

Robust TTM margins

Sustained high TTM net and EBIT margins indicate durable pricing power and operational efficiency in core therapeutic areas. Strong margins provide internal funding for R&D and commercialization, supporting long-term competitiveness even if top-line growth is modest.

Positive free cash flow

Material positive free cash flow, close to reported earnings, enhances the company's ability to self-fund development, pay down debt, and invest in launches. Improved FCF versus prior periods strengthens financial flexibility for durable strategic execution.

Established pharmaceutical business model

Integrated drug R&D, manufacturing and global marketing creates diversified revenue channels (in-house, licensed, and collaboration income). This vertically integrated model and international presence support steady demand and multiple paths to replenish the pipeline over the medium term.

Negative Factors

Earnings and revenue volatility

History of large losses and sharp revenue swings signals unstable product lifecycles or one-off impacts. Such volatility impairs forecasting, capital allocation and investor confidence, raising the risk that margins and cash generation may not persist consistently over the next several quarters.

Weak operating cash conversion

Low operating cash conversion versus reported earnings suggests working-capital timing or noncash earnings components. This inconsistency can constrain funding for R&D and launches, forcing reliance on financing in weak periods and making sustainable investment programs harder to maintain.

Balance-sheet volatility and prior elevated leverage

Although leverage improved TTM, prior periods of substantially higher debt and swings in equity indicate balance-sheet sensitivity. This history increases vulnerability to shocks and could limit strategic flexibility if cashflows weaken or if new large investments are required.

Sumitomo Dainippon Pharma Co Business Overview & Revenue Model

Company Description

Sumitomo Pharma Co., Ltd. manufactures and sells pharmaceuticals, food ingredients and additives, veterinary medicines, and others in Japan, North America, China, and internationally. The company offers pharmaceutical products, such as therapeutic agents for Parkinson's disease, depression, type 2 diabetes, systemic fungal infection, hypertension, pruritus, chronic obstructive pulmonary disease, angina pectoris, and arrhythmia. It also provides products for atypical antipsychotic, antiepileptic, carbapenem antibiotic, and gastrointestinal; and Anderson-Fabry disease drugs. In addition, the company offers food ingredients and additives, such as polysaccharides, as well as seasonings, such as soups or bouillons; and chemical product materials, which include pharmaceutical excipients, personal care products, coatings and industrial materials, and electronic materials. Further, it provides veterinary medicines for companion animals, such as dogs and cats; and livestock comprising cattle, swine, poultry, horses, and aquacultured fish. Sumitomo Pharma Co., Ltd. has partnerships with Healios K.K.; Keio University; RIKEN; the Center for iPS Cell Research and Application; Kyoto University; and Aikomi Co., Ltd., as well as a joint development agreement with SanBio Company Limited; and collaboration and license agreement with Otsuka Pharmaceutical Co., Ltd. It also has a strategic alliance with Roivant Sciences Ltd. The company was formerly known as Sumitomo Dainippon Pharma Co., Ltd. and changed its name to Sumitomo Pharma Co., Ltd. in April 2022. The company was founded in 1897 and is headquartered in Osaka, Japan. Sumitomo Pharma Co., Ltd. is a subsidiary of Sumitomo Chemical Company, Limited.

How the Company Makes Money

Sumitomo Dainippon Pharma generates revenue primarily through the sale of its pharmaceutical products, which include a diverse portfolio of prescription drugs and specialty medications. The company has established key revenue streams from its proprietary drugs, particularly in psychiatry and neurology, as well as from partnerships and collaborations that enhance its drug pipeline. Additionally, the company engages in licensing agreements and joint ventures with other pharmaceutical companies to expand its market reach and share the costs of research and development. Collaborations with biotech firms and research institutions also provide access to innovative therapies, further contributing to Sumitomo Dainippon Pharma's earnings. The company is also involved in the global market, which helps diversify its revenue sources.

Sumitomo Dainippon Pharma Co Financial Statement Overview

Summary

Strong TTM profitability recovery (net margin ~24%, EBIT margin ~25%) with positive free cash flow and improved leverage (debt-to-equity under 1.0). Offsetting this, recent years show pronounced volatility (major FY2024 loss, sharp revenue swings) and weak/uneven cash conversion (operating cash flow ~0.25x of net income), which keeps the score moderate.

Income Statement

Profitability has rebounded sharply in TTM (Trailing-Twelve-Months): net margin is strong (~24%) with solid operating profitability (EBIT margin ~25%) on modest revenue growth (~2%). However, results have been highly volatile—FY2024 showed very large losses and a steep revenue decline, followed by a much weaker but positive FY2025, before the outsized TTM recovery. The key strength is current margin strength; the key weakness is the recent track record of instability in revenue and earnings.

Balance Sheet

Leverage looks improved in TTM (Trailing-Twelve-Months) with debt-to-equity under 1.0, a meaningful step down from the elevated leverage seen in FY2024–FY2025 (debt-to-equity well above 1.0). Equity levels have also swung significantly across periods, underscoring balance-sheet volatility. Current returns on equity are very strong in TTM, but given the recent large loss year and prior high leverage, the balance sheet still carries risk and warrants a more cautious score.

Cash Flow

TTM (Trailing-Twelve-Months) free cash flow is positive and up substantially versus the prior period, and free cash flow is relatively close to net income (about 0.88x), which is supportive of earnings quality. That said, operating cash flow remains low relative to reported earnings (about 0.25x in TTM), suggesting working-capital or timing effects. History is also mixed, including a very large cash outflow in FY2024 and weak cash generation in FY2025, so consistency remains the main concern.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	453.39B	398.83B	314.56B	555.54B	560.03B	515.95B
Gross Profit	268.59B	245.40B	187.98B	376.63B	402.91B	378.18B
EBITDA	137.13B	56.67B	-281.07B	-3.50B	124.36B	103.11B
Net Income	110.09B	23.63B	-314.97B	-74.51B	56.41B	56.22B
Balance Sheet
Total Assets	815.52B	742.60B	907.51B	1.13T	1.31T	1.31T
Cash, Cash Equivalents and Short-Term Investments	57.32B	39.96B	36.13B	143.48B	202.98B	193.70B
Total Debt	258.95B	305.42B	418.88B	346.37B	284.54B	290.68B
Total Liabilities	526.58B	573.13B	751.37B	727.96B	634.44B	659.95B
Stockholders Equity	288.94B	169.48B	156.06B	406.75B	607.89B	580.57B
Cash Flow
Free Cash Flow	47.09B	3.47B	-257.62B	-805.00M	17.75B	124.80B
Operating Cash Flow	53.28B	16.50B	-241.89B	11.94B	31.24B	135.60B
Investing Cash Flow	26.68B	99.75B	33.04B	52.42B	-18.28B	8.88B
Financing Cash Flow	-112.20B	-108.84B	77.85B	-146.82B	-21.43B	-57.22B

Sumitomo Dainippon Pharma Co Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2421.50
• 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:4506, the sentiment is Neutral. The current price of 2421.5 is below the 20-day moving average (MA) of 2490.10, below the 50-day MA of 2466.81, and above the 200-day MA of 1768.33, indicating a neutral trend. The MACD of 11.00 indicates Positive momentum. The RSI at 48.01 is Neutral, neither overbought nor oversold. The STOCH value of 23.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4506.

Sumitomo Dainippon Pharma Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4507	84 Outperform	¥3.12T	16.00	12.22%	2.22%	4.48%	11.08%
4516	77 Outperform	¥345.32B	11.61	―	2.12%	4.07%	22.59%
4523	68 Neutral	¥1.44T	34.57	5.75%	3.51%	6.79%	22.14%
4547	66 Neutral	¥198.51B	14.85	6.57%	2.48%	13.11%	41.57%
4502	65 Neutral	¥9.18T	80.61	0.54%	4.11%	-2.84%	-88.29%
4506	62 Neutral	$962.05B	8.74	79.99%	―	29.92%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Sumitomo Dainippon Pharma Co Corporate Events

Sumitomo Pharma’s iPS Cell Parkinson’s Therapy Heads to Key Japan Regulatory Review

Sumitomo Pharma Co., Ltd. and Tokyo-based RACTHERA Inc. have applied for manufacturing and marketing authorization in Japan for AMCHEPRY, an allogeneic iPS cell-derived dopaminergic neural progenitor cell therapy for improving motor function during off-time in patients with advanced Parkinson’s disease. Japan’s Ministry of Health, Labour and Welfare has placed AMCHEPRY on the agenda of its Pharmaceutical Affairs and Food Sanitation Council’s Committee on Regenerative Medicine Products and Biotechnologies meeting on February 19, 2026, where a decision on approval is expected, though the company does not anticipate any impact on earnings for the fiscal year ending March 2026.

The scheduled regulatory review underscores Sumitomo Pharma’s push into cutting-edge regenerative medicine for neurodegenerative disorders, highlighting its bid to secure an early leadership position in cell-based therapies for Parkinson’s disease. While near-term financial effects are expected to be limited, a positive decision could strengthen the company’s longer-term growth prospects and competitive standing in Japan’s high-value, innovation-driven pharmaceuticals market.

The most recent analyst rating on (JP:4506) stock is a Hold with a Yen2481.00 price target. To see the full list of analyst forecasts on Sumitomo Dainippon Pharma Co stock, see the JP:4506 Stock Forecast page.

Sumitomo Pharma Posts Surging Profit and Higher Revenue in Q3 FY2025 Under IFRS

Sumitomo Pharma reported strong earnings momentum for the third quarter of the fiscal year ending March 31, 2026, with revenue rising to ¥347.7 billion from ¥293.2 billion year-on-year and core operating profit surging more than fourfold to ¥109.4 billion, driven by higher sales, lower selling, general and administrative expenses, and reduced R&D spending. Operating profit jumped to ¥109.8 billion and net profit attributable to owners of the parent climbed to ¥107.7 billion, pushing ROE to 43.0% and ROIC to 20.7%, although cash and cash equivalents declined to ¥57.3 billion amid lower operating cash flow in the prior year and reduced investing inflows, highlighting a trade-off between improved profitability and a tighter liquidity position as the company advances its pipeline and adjusts its cost structure.

The most recent analyst rating on (JP:4506) stock is a Buy with a Yen2501.00 price target. To see the full list of analyst forecasts on Sumitomo Dainippon Pharma Co stock, see the JP:4506 Stock Forecast page.

Sumitomo Pharma Outlines Q3 FY2025 Results With Caution on Forward-Looking Data

Sumitomo Pharma Co., Ltd. announced that President and CEO Toru Kimura held a conference on January 30, 2026, to discuss the company’s financial results for the third quarter of fiscal year 2025, covering the period from April 1 to December 31, 2025. The company emphasized that the materials presented include forward-looking information based on current assumptions and estimates, and highlighted that actual performance and development outcomes may differ materially due to various risks and uncertainties, underscoring a cautious stance toward projections and the non-promotional, non-medical-advice nature of product-related information provided.

The most recent analyst rating on (JP:4506) stock is a Buy with a Yen2501.00 price target. To see the full list of analyst forecasts on Sumitomo Dainippon Pharma Co stock, see the JP:4506 Stock Forecast page.