Towa Pharmaceutical Co (4553) AI Stock Analysis

• Market Cap: ¥143.71B
• Dividend Yield: 2.35%
• Average Volume (3M): 166.45K
• Price to Earnings (P/E): 9.0
• Beta (1Y): 0.73
• Revenue Growth: 11.11%
• EPS Growth: -5.42%
• Country: JP
• Employees: 4,588
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 51.06
• Shares Outstanding: 51,516,000
• 10 Day Avg. Volume: 118,560
• 30 Day Avg. Volume: 166,453
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥3,396.45
• Price Target Upside: 14.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 72 Outperform
• Price Target: ¥3,313.00 ▲(11.40% Upside)

Towa Pharmaceutical Co's stock score is primarily driven by its strong financial performance and attractive valuation. The company's effective cost management and competitive profit margins are significant strengths. However, the negative free cash flow and bearish technical indicators present risks that temper the overall score.

Towa Pharmaceutical Co Business Overview & Revenue Model

Company Description

Towa Pharmaceutical Co., Ltd., together with its subsidiaries, researches, develops, produces, and sells ethical drugs, active pharmaceutical ingredients, and intermediates in Japan. The company provides its products in the therapeutic areas of diabetes, digestive system, nervous system, and allergic diseases, as well as vitamins, antibiotics, and oncology products. It had a portfolio of approximately 700 drug products. Towa Pharmaceutical Co., Ltd. was founded in 1951 and is headquartered in Osaka, Japan.

How the Company Makes Money

Towa Pharmaceutical Co., Ltd. generates revenue primarily through the sale of its generic pharmaceutical products. The company's business model revolves around the development and commercialization of affordable drug alternatives to branded medications, allowing it to capture a significant share of the pharmaceutical market. Revenue streams include direct sales to healthcare institutions, pharmacies, and distributors. Towa Pharmaceutical also invests in research and development to expand its product portfolio, ensuring a continuous pipeline of new generics entering the market. Additionally, strategic partnerships with other pharmaceutical entities and healthcare providers play a crucial role in enhancing the company's market reach and distribution capabilities, further contributing to its earnings.

Towa Pharmaceutical Co Financial Statement Overview

Summary

Towa Pharmaceutical Co shows strong revenue growth and effective cost management with a healthy gross profit margin. However, negative free cash flow due to high capital expenditures poses a potential liquidity risk. Moderate leverage is manageable, but debt levels need monitoring.

Income Statement

Towa Pharmaceutical Co has demonstrated strong revenue growth with a Revenue Growth Rate of 13.9% in 2025, indicating an upward trend over recent years. The Gross Profit Margin is healthy at 36.5%, showing effective cost management. The Net Profit Margin stands at 7.3%, which is competitive within the industry. While the EBIT Margin improved to 8.9%, up from previous years, the EBITDA Margin at 18.5% reflects substantial non-cash expenses, suggesting room for improvement.

Balance Sheet

The Debt-to-Equity Ratio is 1.35, which indicates moderate leverage and is manageable given the industry's capital demands. Return on Equity (ROE) is robust at 11.1%, demonstrating effective use of shareholders' equity to generate profits. The Equity Ratio is stable at 36.5%, showing a solid equity base relative to total assets, although there is a need to monitor debt levels.

Cash Flow

Operating Cash Flow to Net Income Ratio is 1.23, indicating strong cash generation relative to reported earnings. However, the Free Cash Flow is negative, primarily due to high capital expenditures, leading to a negative Free Cash Flow to Net Income Ratio. This suggests potential liquidity pressures if capital investments don't translate into future cash flows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	259.59B	259.59B	227.93B	208.86B	165.62B	154.90B
Gross Profit	94.73B	94.73B	81.38B	72.71B	70.19B	65.45B
EBITDA	41.69B	48.05B	35.54B	24.92B	29.49B	30.35B
Net Income	18.99B	18.99B	16.17B	2.20B	15.91B	13.96B
Balance Sheet
Total Assets	470.82B	470.82B	430.65B	371.35B	329.94B	245.67B
Cash, Cash Equivalents and Short-Term Investments	45.47B	45.47B	29.65B	24.26B	32.83B	22.91B
Total Debt	230.98B	230.98B	202.36B	173.06B	144.13B	84.77B
Total Liabilities	299.19B	299.19B	274.76B	234.45B	197.77B	129.07B
Stockholders Equity	171.63B	171.63B	155.89B	136.89B	132.17B	116.60B
Cash Flow
Free Cash Flow	-5.33B	-5.33B	-31.11B	-27.93B	8.55B	2.13B
Operating Cash Flow	23.40B	23.40B	8.21B	2.54B	22.13B	12.01B
Investing Cash Flow	-31.29B	-31.29B	-40.39B	-30.28B	-59.73B	-9.10B
Financing Cash Flow	21.57B	21.57B	35.41B	17.48B	46.54B	184.00M

Towa Pharmaceutical Co Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2974.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4553, the sentiment is Neutral. The current price of 2974 is below the 20-day moving average (MA) of 2992.80, below the 50-day MA of 3087.42, and above the 200-day MA of 2914.71, indicating a neutral trend. The MACD of -27.60 indicates Negative momentum. The RSI at 46.17 is Neutral, neither overbought nor oversold. The STOCH value of 26.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4553.

Towa Pharmaceutical Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4521	80 Outperform	138.67B	11.63	9.14%	2.99%	31.19%	72.28%
4569	77 Outperform	80.33B	8.51	6.67%	3.40%	9.83%	86.18%
4553	72 Outperform	¥143.71B	8.98	9.60%	2.35%	11.11%	-5.42%
4547	71 Outperform	179.52B	15.19	5.72%	2.04%	15.40%	7.73%
4887	60 Neutral	201.23B	219.40	12.41%	1.33%	3.52%	-95.28%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Towa Pharmaceutical Co Corporate Events

Towa Pharmaceutical Reports Mixed Financial Results for Q1 2025

Towa Pharmaceutical Co., Ltd. reported its consolidated financial results for the three months ended June 30, 2025, showing a 4.1% increase in net sales compared to the previous year. However, the company experienced a significant decline in profits, with operating profit decreasing by 8.2% and ordinary profit falling by 54.0%. The forecast for the fiscal year ending March 31, 2026, anticipates a 7.9% increase in net sales and a 16.2% rise in operating profit, despite a projected decrease in ordinary profit and profit attributable to owners of the parent. This mixed financial performance may impact the company’s market positioning and stakeholder confidence.

The most recent analyst rating on (JP:4553) stock is a Hold with a Yen3200.00 price target. To see the full list of analyst forecasts on Towa Pharmaceutical Co stock, see the JP:4553 Stock Forecast page.

Towa Pharmaceutical Reports Minor Fire Incident at Yamagata Plant

Towa Pharmaceutical Co., Ltd. reported a fire incident at its Yamagata Plant’s First Solid Dosage Building, which was promptly extinguished with no injuries and minimal material damage. The fire, caused by static electricity igniting dust in a machine room, led to temporary disruptions, but production and shipments are resuming with no expected long-term impact on business performance.

The most recent analyst rating on (JP:4553) stock is a Hold with a Yen3200.00 price target. To see the full list of analyst forecasts on Towa Pharmaceutical Co stock, see the JP:4553 Stock Forecast page.

Towa Pharmaceutical Reports Minor Fire Incident at Yamagata Plant

Towa Pharmaceutical Co., Ltd. reported a fire incident at its Yamagata Plant, specifically in the machine room of the First Solid Dosage Building. The fire, which occurred on July 14, 2025, caused no injuries and only minor material damage to a dust collector. The company has resumed packaging operations and is gradually restoring other processes, with no immediate impact on production and shipment from other buildings. The potential impact on business performance is under review, and stakeholders will be informed if significant effects are anticipated.

The most recent analyst rating on (JP:4553) stock is a Hold with a Yen3200.00 price target. To see the full list of analyst forecasts on Towa Pharmaceutical Co stock, see the JP:4553 Stock Forecast page.

Fire Incident at Towa Pharmaceutical’s Yamagata Plant

Towa Pharmaceutical Co., Ltd. reported a fire incident at its Yamagata Plant’s First Solid Dosage Building on July 14, 2025. The fire, which was extinguished by the local fire department, caused material damage to the machine room but resulted in no injuries. The company is investigating the cause and assessing the impact on business performance, although other facilities at the plant remain operational.

The most recent analyst rating on (JP:4553) stock is a Hold with a Yen3200.00 price target. To see the full list of analyst forecasts on Towa Pharmaceutical Co stock, see the JP:4553 Stock Forecast page.

Towa Pharmaceutical Completes Treasury Shares Disposal for Compensation

Towa Pharmaceutical Co., Ltd. has completed the payment procedures for the disposal of 800 treasury shares as restricted stock compensation, a decision made by the Board of Directors on June 25, 2025. This move involves the allocation of shares to three directors, excluding those in specific roles, and reflects the company’s strategic approach to compensation, potentially impacting its governance and stakeholder relations.

The most recent analyst rating on (JP:4553) stock is a Hold with a Yen3200.00 price target. To see the full list of analyst forecasts on Towa Pharmaceutical Co stock, see the JP:4553 Stock Forecast page.

Towa Pharmaceutical Affirms Independence Amidst Shareholder Control

Towa Pharmaceutical Co., Ltd. has announced details regarding its controlling shareholder, YOSHIDA JIMUSHO, which holds 45.74% of its voting rights. Despite the significant shareholding, the company maintains its independence with no business transactions or influence from YOSHIDA JIMUSHO on its operations.

The most recent analyst rating on (JP:4553) stock is a Hold with a Yen3200.00 price target. To see the full list of analyst forecasts on Towa Pharmaceutical Co stock, see the JP:4553 Stock Forecast page.

Towa Pharmaceutical’s Parent Company Financial Results Announced

Towa Pharmaceutical Co., Ltd. has announced the financial results of its parent company, YOSHIDA JIMUSHO, for the fiscal year ending March 31, 2025. YOSHIDA JIMUSHO, which holds a 40.85% voting rights in Towa Pharmaceutical, is involved in investment, trading, leasing, and real estate management. This announcement provides insights into the financial health and strategic positioning of Towa Pharmaceutical’s parent company, potentially impacting stakeholders’ perceptions and the company’s future operations.

The most recent analyst rating on (JP:4553) stock is a Hold with a Yen3200.00 price target. To see the full list of analyst forecasts on Towa Pharmaceutical Co stock, see the JP:4553 Stock Forecast page.

Towa Pharmaceutical Announces Disposal of Treasury Shares for Director Compensation

Towa Pharmaceutical Co., Ltd. has announced a resolution to dispose of 800 treasury shares as part of a restricted stock compensation plan for its directors. This move is designed to align the directors’ compensation with the company’s performance and shareholder value, fostering a long-term increase in corporate value and strengthening shareholder-oriented management.

The most recent analyst rating on (JP:4553) stock is a Buy with a Yen4200.00 price target. To see the full list of analyst forecasts on Towa Pharmaceutical Co stock, see the JP:4553 Stock Forecast page.