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Eisai Co Ltd (JP:4523)
:4523

Eisai Co (4523) AI Stock Analysis

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JP

Eisai Co

(OTC:4523)

Rating:72Outperform
Price Target:
¥4,468.00
▲(9.56%Upside)
Eisai Co's stock is strong, primarily due to its solid financial performance, which reflects growth and stability. The technical indicators provide a moderately positive outlook, while the valuation is attractive with a reasonable P/E ratio and strong dividend yield. Focus on improving cash flow management could further enhance the company's financial standing.

Eisai Co (4523) vs. iShares MSCI Japan ETF (EWJ)

Eisai Co Business Overview & Revenue Model

Company DescriptionEisai Co., Ltd. (4523) is a leading global pharmaceutical company headquartered in Tokyo, Japan. The company operates primarily in the pharmaceutical sector, focusing on the research, development, production, and marketing of a wide range of prescription medicines. Eisai's core therapeutic areas include neurology and oncology, with flagship products such as Aricept, used for the treatment of Alzheimer's disease, and Lenvima, an oncology medication. The company is committed to addressing unmet medical needs and improving the quality of life for patients worldwide.
How the Company Makes MoneyEisai Co., Ltd. generates revenue primarily through the sale of its pharmaceutical products. The company earns money by developing and marketing a portfolio of prescription drugs, particularly in the fields of neurology and oncology. Key revenue streams include global sales of flagship products like Aricept, which is used to treat Alzheimer's disease, and Lenvima, an anti-cancer drug. Eisai also enters into strategic partnerships and collaborations with other pharmaceutical companies, which contribute to its earnings through licensing agreements, co-promotion deals, and research collaborations. Additionally, the company invests in research and development to innovate new treatments, which can lead to future revenue growth as these products reach the market.

Eisai Co Earnings Call Summary

Earnings Call Date:May 15, 2025
(Q4-2025)
|
% Change Since: 5.08%|
Next Earnings Date:Aug 01, 2025
Earnings Call Sentiment Neutral
Eisai Co. reported strong fiscal year 2024 results with increased revenue and profit, driven by the performance of their global brands, particularly LEQEMBI. However, challenges remain in the U.S. market with slow penetration of LEQEMBI and increased costs. Structural reforms and global expansion efforts are positive signs, but competitive pressures and cost management pose ongoing challenges.
Q4-2025 Updates
Positive Updates
Record Revenue and Profit for FY 2024
Eisai Co. reported an increase in both revenue and profits for fiscal year 2024, exceeding their forecast. Total revenue reached ¥789.4 billion, a year-over-year increase of ¥47.6 billion.
Strong Performance of Global Brands
The three global brands, LENVIMA, Lemborexant (Dayvigo), and LEQEMBI, collectively achieved ¥426.5 billion in revenue, marking a 24% year-over-year increase.
LEQEMBI Approval and Global Expansion
LEQEMBI has been approved in 44 countries and exceeded its full-year revenue forecast with ¥44.3 billion in global revenue for FY 2024.
R&D Expense Reduction
R&D expenses were reduced by 1.6 percentage points due to the closure of inactive research laboratories and reduced impairment losses.
Structural Reforms in Americas
Eisai has completed structural reforms in the Americas, streamlining the sales force and administrative functions to improve financial performance.
Negative Updates
Increased Cost of Sales
Cost of sales increased by 0.5 percentage points due to a one-time decrease in revenue and the impact of the Inflation Reduction Act related to Lenvima.
Challenges in U.S. Market for LEQEMBI
The U.S. market for LEQEMBI is approaching the end of the demand stimulation phase, but has not yet entered the demand expansion phase as anticipated.
Slow LEQEMBI Market Penetration
Despite approval, the penetration of LEQEMBI in the U.S. has been slower than expected, largely due to challenges in establishing treatment pathways across diverse healthcare systems.
SG&A Expenses Increase
SG&A expenses increased by 1.2 percentage points, due to continued investment in LEQEMBI and temporary increases related to U.S. structural reforms.
LEQEMBI's Competitive Pressure
Concerns have been raised regarding competition from other Alzheimer's treatments, potentially impacting LEQEMBI's market share.
Company Guidance
During the financial results briefing session for fiscal year 2024, Eisai reported a significant increase in both revenue and profit, exceeding their initial forecasts. Revenue from their three global brands, LENVIMA, Lemborexant, and LEQEMBI, totaled ¥426.5 billion, marking a 24% year-over-year increase. LEQEMBI alone contributed ¥40 billion to this growth. The cost of sales increased by 0.5 percentage points, while R&D expenses decreased by 1.2 percentage points, largely due to the closure of some research facilities. SG&A expenses saw a controlled increase of 1.2 percentage points due to investments in LEQEMBI marketing and U.S. structural reforms. LEQEMBI's revenue for FY 2024 reached ¥44.3 billion globally, with significant contributions from the Americas and Japan. Looking ahead, Eisai forecasts LEQEMBI's revenue to reach ¥76.5 billion in fiscal 2025, driven by expected demand expansion phases in key markets like the U.S. and Japan. The company plans to continue investing in LEQEMBI while implementing organizational transformations to enhance efficiency and achieve profitability by fiscal 2026.

Eisai Co Financial Statement Overview

Summary
Eisai Co reflects a commendable financial position with solid growth and profitability. The income statement shows steady revenue growth but highlights some operational efficiency challenges. The balance sheet is robust, with low leverage and strong equity ratios, underscoring financial health. However, cash flow management needs attention to ensure sustainable growth. Overall, the company stands on solid financial ground but should focus on optimizing operational and cash flow efficiencies.
Income Statement
75
Positive
Eisai Co has demonstrated solid revenue growth with a notable increase from 2024 to 2025. The gross profit margin remains strong, indicating efficient cost management. However, the EBIT margin has decreased slightly, signaling potential pressure on operational efficiency. Net profit margin shows robust performance, though the decrease in EBIT suggests a need for operational improvements.
Balance Sheet
80
Positive
The balance sheet is strong with a healthy equity ratio, indicating financial stability. The company maintains a low debt-to-equity ratio, suggesting prudent leverage management. Return on equity remains impressive, reflecting effective utilization of shareholder funds. Overall, the balance sheet supports the company's growth trajectory with minimal financial risk.
Cash Flow
70
Positive
Eisai Co shows a mixed picture in cash flow metrics. While the operating cash flow to net income ratio is positive, free cash flow has decreased significantly, indicating challenges in cash generation. The drop in free cash flow growth is noteworthy, suggesting potential issues in funding operations or investments. Improvements in cash flow management could enhance financial flexibility.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue789.40B741.75B744.40B756.23B645.94B
Gross Profit620.59B586.42B566.57B581.39B484.63B
EBITDA104.49B103.11B87.26B94.55B90.05B
Net Income46.43B42.41B55.43B47.95B41.94B
Balance Sheet
Total Assets1.39T1.39T1.26T1.24T1.09T
Cash, Cash Equivalents and Short-Term Investments265.56B305.12B267.89B310.06B249.01B
Total Debt187.52B159.41B126.11B94.89B89.89B
Total Liabilities520.58B494.82B440.78B467.78B362.07B
Stockholders Equity841.42B875.61B799.96B748.82B703.18B
Cash Flow
Free Cash Flow18.18B31.17B-36.33B77.12B35.71B
Operating Cash Flow30.12B55.99B-1.77B117.59B73.85B
Investing Cash Flow-10.10B-25.32B-22.72B-28.85B-36.87B
Financing Cash Flow-57.81B-22.72B-24.52B-48.97B-55.91B

Eisai Co Technical Analysis

Technical Analysis Sentiment
Positive
Last Price4078.00
Price Trends
50DMA
3993.20
Positive
100DMA
4074.92
Positive
200DMA
4461.42
Negative
Market Momentum
MACD
7.60
Negative
RSI
56.03
Neutral
STOCH
62.40
Neutral
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 4078 is above the 20-day moving average (MA) of 4020.75, above the 50-day MA of 3993.20, and below the 200-day MA of 4461.42, indicating a neutral trend. The MACD of 7.60 indicates Negative momentum. The RSI at 56.03 is Neutral, neither overbought nor oversold. The STOCH value of 62.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4523.

Eisai Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$2.23T12.6512.99%2.29%0.73%7.75%
73
Outperform
$295.50B13.707.90%2.12%10.09%63.28%
72
Outperform
$1.15T24.905.34%3.92%6.42%10.82%
69
Neutral
$263.42B8.0611.16%3.95%20.05%94.28%
65
Neutral
$6.92T63.871.50%4.49%7.45%-25.77%
65
Neutral
¥345.58B10.59-2.88%2.67%11.80%-6.84%
62
Neutral
$390.54B16.5213.50%26.79%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:4523
Eisai Co
4,078.00
-2,385.29
-36.91%
JP:4506
Sumitomo Dainippon Pharma Co
983.00
593.00
152.05%
JP:4540
Tsumura & Co
3,443.00
-560.23
-13.99%
JP:4530
Hisamitsu Pharmaceutical Co
4,050.00
386.21
10.54%
JP:4507
Shionogi & Co
2,534.50
509.81
25.18%
JP:4502
Takeda Pharmaceutical Co
4,366.00
358.67
8.95%
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.Date of analysis: Jun 27, 2025