Eisai Co (4523) AI Stock Analysis

• Market Cap: ¥1.48T
• Dividend Yield: 3.51%
• Average Volume (3M): 1.34M
• Price to Earnings (P/E): 34.6
• Beta (1Y): 0.94
• Revenue Growth: 6.79%
• EPS Growth: 22.14%
• Country: JP
• Employees: 11,067
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): N/A
• Shares Outstanding: 291,649,140
• 10 Day Avg. Volume: 1,231,250
• 30 Day Avg. Volume: 1,336,443
• PEG Ratio: 2.35
• Price to Book (P/B): 1.40
• Price to Sales (P/S): 1.49
• P/FCF Ratio: 64.63
• 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: ¥5,425.00
• Price Target Upside: 13.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: ¥4,974.00 ▲(3.91% Upside)
• Action: Downgraded Date: 02/10/26
• Date: Action: Downgraded 02/10/26

The score is driven primarily by strong financial performance (sharp TTM revenue rebound, resilient margins, and conservative leverage), partially tempered by cash-flow volatility and only mid-level returns on equity. Technicals are mixed with negative MACD and price below key medium-term averages, while valuation is balanced by a solid dividend yield but a relatively high P/E.

Positive Factors

Strong revenue rebound

A 47.2% TTM revenue rebound indicates durable product traction and demand across Eisai's core therapeutic areas. Sustained top-line growth improves funding capacity for R&D and lifecycle expansion, bolstering long-term commercial momentum and strategic optionality.

High gross margin

A ~78% gross margin reflects pricing power and a favorable branded-product mix, supporting durable profitability even with heavy R&D spending. High gross margins provide operating leeway for clinical investment and help preserve cash flow through reimbursement cycles.

Conservative leverage

Low leverage (D/E ~0.28) and a large equity base give Eisai financial flexibility to fund ongoing development, pursue selective M&A, and absorb reimbursement timing shocks. A conservative balance sheet supports multi-quarter resilience in capital allocation.

Negative Factors

Cash-flow volatility

Historic swings in operating and free cash flow reduce predictability of internal funding for trials and commercialization. FCF/NetIncome ~0.75 shows conversion below parity, increasing reliance on timing decisions for working capital or external funding in weaker periods.

Moderate ROE

An ROE around 5.8% suggests only modest capital efficiency versus typical specialty pharma expectations. Persistently mid-single-digit returns can constrain shareholder value creation and imply that heavy reinvestment or pricing pressures limit profit conversion from growing revenues.

Limited net margin leverage

Despite strong gross margins, net margin near 6.1% and an EBIT margin ~8.6% indicate constrained bottom-line leverage, likely from R&D and SG&A intensity and pricing/reimbursement pressures. This limits free cash flow expansion relative to revenue gains.

Eisai Co Business Overview & Revenue Model

Company Description

Eisai Co., Ltd. offers pharmaceutical products in Japan. It offers Aricept for the treatment of alzheimer's disease/dementia with Lewy bodies; Methycobal for the treatment of peripheral neuropathy; and Fycompa, an antiepileptic drug for the adjunctive treatment of partial-onset and primary generalized tonic-clonic seizures. The company also provides Lyrica for pain treatment; Dayvigo, an anti-insomnia drug for the treatment of adults with insomnia; Lenvima, an anticancer agent/molecular targeted medicine for the treatment of thyroid cancer, renal cell carcinoma in combination with everolimus, and hepatocellular carcinoma; and Halaven, an anticancer agent/microtubule dynamics inhibitor for the treatment of breast cancer and liposarcoma. In addition, it offers Pariet, a proton-pump inhibitor for the treatment of gastric and duodenal ulcers, reflux esophagitis, and eradication of Helicobacter pylori infections, etc.; Humira, a fully human anti-TNF-a monoclonal antibody for the treatment of autoimmune diseases, such as rheumatoid arthritis; and Chocola BB plus, a vitamin B2 preparation for rough skin and stomatitis, as well as various products, which include third-class OTC drugs, designated quasi-drugs, and food with nutrient function. The company was formerly known as Nihon Eisai Co., Ltd. and changed its name to Eisai Co., Ltd. in 1955. Eisai Co., Ltd. was incorporated in 1941 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Eisai generates revenue primarily through the sale of its pharmaceutical products, which are distributed globally across various markets. The company derives significant income from its flagship products, particularly in oncology and neurology. Additionally, Eisai engages in licensing agreements and collaborations with other pharmaceutical companies, allowing it to share research and development costs while also generating upfront payments and royalties from successful product sales. The company's strategic partnerships, particularly in the development of new therapies and clinical trials, play a crucial role in enhancing its product portfolio and revenue streams.

Eisai Co Financial Statement Overview

Summary

Strong TTM revenue rebound (+47.2%) with attractive gross margin (~78%) and moderate operating profitability (EBIT ~8.6%). Balance sheet leverage is conservative (debt-to-equity ~0.28), but returns are mid-single-digit (~5.8% ROE). Cash flow is currently solid (TTM FCF ~¥72.9B) yet historically volatile, which tempers the score.

Income Statement

TTM (Trailing-Twelve-Months) revenue rebounded sharply (+47.2%), while profitability remained steady-to-improving with strong gross margin (~78%) and moderate operating profitability (EBIT margin ~8.6%, EBITDA margin ~13.5%). Net margin is positive but not high (~6.1%) and has been somewhat range-bound versus prior years, suggesting solid pricing/pipeline contribution but limited bottom-line leverage. Overall: strong top-line momentum and resilient margins, tempered by only moderate net profitability for the sector.

Balance Sheet

The balance sheet looks conservative with low-to-moderate leverage: TTM (Trailing-Twelve-Months) debt-to-equity is ~0.28 with sizeable equity (~¥890B) supporting the asset base (~¥1.49T). Returns on equity are positive but mid-single-digit (~5.8% TTM), indicating profitability is adequate but not exceptional relative to capital employed. Key watch item is the upward drift in total debt versus earlier years, though leverage remains manageable.

Cash Flow

TTM (Trailing-Twelve-Months) cash generation is solid with operating cash flow (~¥86.6B) and free cash flow (~¥72.9B), and free cash flow growth is very strong off the prior period. However, cash flow has been volatile historically (including negative operating/free cash flow in 2023), and current free cash flow trails net income (free cash flow to net income ~0.75), suggesting working-capital swings or reinvestment needs can meaningfully impact conversion. Overall: healthy recent cash flow, but with a clear volatility risk.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	808.19B	789.40B	741.75B	744.40B	756.23B	645.94B
Gross Profit	628.38B	620.59B	586.42B	566.57B	581.39B	484.63B
EBITDA	100.82B	104.49B	103.11B	87.26B	94.55B	90.05B
Net Income	42.76B	46.43B	42.41B	55.43B	47.95B	41.94B
Balance Sheet
Total Assets	1.41T	1.39T	1.39T	1.26T	1.24T	1.09T
Cash, Cash Equivalents and Short-Term Investments	285.38B	265.56B	305.12B	267.89B	310.06B	249.01B
Total Debt	238.92B	187.52B	159.41B	126.11B	94.89B	89.89B
Total Liabilities	556.09B	520.58B	494.82B	440.78B	467.78B	362.07B
Stockholders Equity	828.51B	841.42B	875.61B	799.96B	748.82B	703.18B
Cash Flow
Free Cash Flow	72.94B	18.18B	31.17B	-36.33B	77.12B	35.71B
Operating Cash Flow	86.55B	30.12B	55.99B	-1.77B	117.59B	73.85B
Investing Cash Flow	-25.51B	-10.10B	-25.32B	-22.72B	-28.85B	-36.87B
Financing Cash Flow	-45.54B	-57.81B	-22.72B	-24.52B	-48.97B	-55.91B

Eisai Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4787.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4523, the sentiment is Positive. The current price of 4787 is below the 20-day moving average (MA) of 4881.25, above the 50-day MA of 4703.72, and above the 200-day MA of 4481.77, indicating a bullish trend. The MACD of 163.50 indicates Negative momentum. The RSI at 73.89 is Negative, neither overbought nor oversold. The STOCH value of 90.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4523.

Eisai Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4507	84 Outperform	¥3.22T	16.00	12.22%	2.22%	4.48%	11.08%
4521	80 Outperform	¥159.74B	-44.66	0.44%	4.16%	-5.99%	-96.04%
4516	77 Outperform	¥346.47B	11.61	―	2.12%	4.07%	22.59%
4523	68 Neutral	¥1.48T	34.57	5.75%	3.51%	6.79%	22.14%
4502	65 Neutral	¥9.22T	80.61	0.54%	4.11%	-2.84%	-88.29%
4506	62 Neutral	¥1.00T	9.11	79.99%	―	29.92%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%