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Towa Pharmaceutical Co
(4553)
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Rating:48Neutral
Price Target:
¥4,138.00
▲(14.31% Upside)
Action:Reiterated
Date:05/16/26
The score is held back primarily by uneven financial quality (volatile earnings, historically negative free cash flow, and elevated leverage) and weak technical momentum (oversold readings with bearish trend vs key moving averages). Valuation is also a headwind due to a high P/E, only partly supported by the dividend yield.
Positive Factors
Business model / Market position
Towa's core generics business serves hospitals, clinics and pharmacies under Japan's national health insurance, creating predictable baseline demand. A broad therapeutic portfolio reduces single-product risk and supports steady recurring revenues as patents expire over time.
Negative Factors
Elevated leverage
A debt-heavy capital structure through 2022–2025 increases interest burden and reduces cushioning against earnings shocks. Elevated leverage constrains strategic flexibility, limits capacity for opportunistic investment, and raises refinancing risk during adverse cycles.
Read all positive and negative factors
Positive Factors
Negative Factors
Business model / Market position
Towa's core generics business serves hospitals, clinics and pharmacies under Japan's national health insurance, creating predictable baseline demand. A broad therapeutic portfolio reduces single-product risk and supports steady recurring revenues as patents expire over time.
Read all positive factors
Towa Pharmaceutical Co (4553) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥198.09B
Dividend Yield2.14%
Average Volume (3M)112.31K
Price to Earnings (P/E)37.7
Beta (1Y)0.64
Revenue Growth5.44%
EPS Growth-72.35%
CountryJP
Employees4,588
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)106.65
Shares Outstanding51,516,000
10 Day Avg. Volume138,760
30 Day Avg. Volume112,306
Financial Highlights & Ratios
PEG Ratio-0.52
Price to Book (P/B)1.11
Price to Sales (P/S)0.72
P/FCF Ratio24.19
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥5,600.00Price Target Upside54.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)448.93
Revenue Forecast (FY)¥303.86B
Towa Pharmaceutical Co Business Overview & Revenue Model
Company Description
Towa Pharmaceutical Co., Ltd., along with its subsidiaries, is actively engaged in the entire pharmaceutical lifecycle within Japan, from researching and developing to manufacturing and marketing prescription medications, active pharmaceutical ing...
How the Company Makes Money
Towa Pharmaceutical primarily makes money by selling prescription generic drugs in Japan. Its core revenue stream comes from supplying generic equivalents of branded medicines after patent/market exclusivity expires; these products are sold throug...
Towa Pharmaceutical Co Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
52
Neutral
Cash Flow
41
Neutral
| Breakdown | Mar 2026 | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 273.71B | 259.59B | 227.93B | 208.86B | 165.62B |
| Gross Profit | 99.10B | 94.73B | 81.38B | 72.71B | 70.19B |
| EBITDA | 38.26B | 48.06B | 43.29B | 25.14B | 33.43B |
| Net Income | 5.25B | 18.99B | 16.17B | 2.20B | 15.91B |
Balance Sheet | |||||
| Total Assets | 475.29B | 470.82B | 430.65B | 371.35B | 332.10B |
| Cash, Cash Equivalents and Short-Term Investments | 45.31B | 45.47B | 29.65B | 24.26B | 32.83B |
| Total Debt | 226.74B | 230.98B | 202.36B | 161.52B | 140.70B |
| Total Liabilities | 297.18B | 299.19B | 274.76B | 234.45B | 199.93B |
| Stockholders Equity | 178.10B | 171.63B | 155.89B | 136.89B | 132.17B |
Cash Flow | |||||
| Free Cash Flow | 8.15B | -5.33B | -29.64B | -26.19B | 10.99B |
| Operating Cash Flow | 30.43B | 23.40B | 8.21B | 2.54B | 22.13B |
| Investing Cash Flow | -25.66B | -31.29B | -40.39B | -30.28B | -59.73B |
| Financing Cash Flow | -6.83B | 21.57B | 35.41B | 17.48B | 46.54B |
Towa Pharmaceutical Co Technical Analysis
Positive
3620.00
Price Trends
3827.10
Positive
3990.41
Positive
3603.41
Positive
Market Momentum
60.82
Negative
57.41
Neutral
61.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4553, the sentiment is Positive. The current price of 3620 is below the 20-day moving average (MA) of 3879.75, below the 50-day MA of 3827.10, and above the 200-day MA of 3603.41, indicating a bullish trend. The MACD of 60.82 indicates Negative momentum. The RSI at 57.41 is Neutral, neither overbought nor oversold. The STOCH value of 61.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4553.
Towa Pharmaceutical Co Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | ¥106.68B | 14.06 | 4.81% | 2.34% | 11.21% | 39.02% | |
58 Neutral | ¥167.47B | 12.37 | 6.70% | 2.48% | 10.28% | 20.76% | |
55 Neutral | ¥166.41B | 18.27 | ― | 2.28% | 6.69% | 6.72% | |
54 Neutral | ¥62.06B | 19.65 | ― | 3.36% | -2.94% | -62.05% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
50 Neutral | ¥138.31B | 67.88 | -2.58% | 4.16% | -18.25% | -84.71% | |
48 Neutral | ¥198.09B | 37.74 | 12.02% | 2.14% | 5.44% | -72.35% |
* Healthcare Sector Average
JP:4553
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Towa Pharmaceutical Co Corporate Events
Towa Pharma to Acquire Tanabe Pharma Factory and Expand Off‑Patent Drug Portfolio
Jul 3, 2026
Towa Pharmaceutical has agreed to acquire all shares of Tanabe Pharma Factory Co., Ltd. from Tanabe Pharma Corporation, turning it into a wholly owned subsidiary to reinforce its production base. Tanabe Pharma Factory brings global-standard manufa...
Towa Pharmaceutical Clarifies Relationship With Controlling Shareholder YOSHIDA JIMUSHO
Jun 24, 2026
Towa Pharmaceutical disclosed that YOSHIDA JIMUSHO, classified as another affiliated company, holds a total of 45.75% of its voting rights, with 40.85% held directly and 4.90% through aggregation as of March 31, 2026. The company also noted that i...
Towa Pharmaceutical Details Parent Firm Ownership and Governance Structure
Jun 24, 2026
Towa Pharmaceutical disclosed the financial results and corporate profile of its parent company, YOSHIDA JIMUSHO, for the fiscal year ended March 31, 2026, underscoring the governance and ownership ties that shape its control structure. YOSHIDA JI...
Towa Pharmaceutical Grants Restricted Treasury Shares to Directors Under Long-Term Incentive Plan
Jun 24, 2026
Towa Pharmaceutical’s board has approved the disposal of 1,188 treasury shares as restricted stock, valued at about ¥4.56 million, to three internal directors as part of its existing stock-based compensation scheme. The payment price is...
Towa Pharmaceutical Reshapes Board with New Strategy and Governance Appointments
Jun 24, 2026
Towa Pharmaceutical Co., Ltd. announced changes to its executive lineup following approvals at its Ordinary General Meeting of Shareholders and subsequent board meeting held on June 24, 2026. The company reaffirmed continuity at the top, reappoint...
Towa Pharmaceutical Revamps Board With New Director and Governance-Focused Appointments
May 21, 2026
Towa Pharmaceutical has announced changes to its board, proposing the reappointment of President and Representative Director Itsuro Yoshida and other incumbent directors, while promoting Hideshi Nakamura, currently General Manager of the President...
Towa Pharmaceutical to Raise Up to ¥20 Billion via DBJ Preferred Share Allotment
May 21, 2026
Towa Pharmaceutical plans to issue up to ¥20 billion in Class A preferred shares through a third-party allotment to Development Bank of Japan, alongside partial amendments to its Articles of Incorporation and a corresponding reduction of shar...
Towa Pharmaceutical Flags Impairment and Reshapes Group Structure
May 14, 2026
Towa Pharmaceutical has clarified the structure of its domestic and overseas segments in materials accompanying its financial results for the year ended March 31, 2026, grouping several subsidiaries under the umbrella of its core domestic operatio...
Towa Pharmaceutical Profit Slumps but Dividend Rises as Company Forecasts Strong Rebound
May 14, 2026
Towa Pharmaceutical reported consolidated net sales of ¥273.7 billion for the year ended March 31, 2026, up 5.4% year on year, while operating profit was roughly flat at ¥23.1 billion and ordinary profit rose 7.4%. Profit attributable to...
Towa Pharmaceutical Books Sunsho Impairment and Cuts Profit Outlook
May 11, 2026
Towa Pharmaceutical said it will book a ¥14.7 billion goodwill impairment at subsidiary Sunsho Pharmaceutical after weaker-than-expected performance in domestic health foods, tougher overseas competition and delays in synergy realization, and...
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.