Towa Pharmaceutical Co (4553) AI Stock Analysis

• Market Cap: ¥180.37B
• Dividend Yield: 2.18%
• Average Volume (3M): 112.31K
• Price to Earnings (P/E): 8.7
• Beta (1Y): 0.74
• Revenue Growth: 9.32%
• EPS Growth: 30.85%
• Country: JP
• Employees: 4,588
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 115.80
• Shares Outstanding: 51,516,000
• 10 Day Avg. Volume: 138,760
• 30 Day Avg. Volume: 112,306
• PEG Ratio: 0.40
• Price to Book (P/B): 0.77
• Price to Sales (P/S): 0.51
• P/FCF Ratio: -24.72
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 333.28
• Revenue Forecast (FY): ¥278.87B

• Rating: 81 Outperform
• Price Target: ¥3,621.00 ▼(-1.20% Downside)

Towa Pharmaceutical Co's stock is rated highly due to strong technical indicators and attractive valuation metrics. The financial performance is solid, but negative free cash flow warrants attention. The absence of earnings call data and corporate events does not impact the score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates expanding market reach and product adoption, strengthening Towa's position in the pharmaceutical industry.

Cash Generation Ability

Strong cash generation supports operational flexibility and investment capacity, enhancing long-term business resilience.

Effective Cost Management

Effective cost management contributes to profitability and competitive pricing, supporting sustainable growth and market competitiveness.

Negative Factors

Negative Free Cash Flow

Negative free cash flow can strain liquidity and limit financial flexibility, posing risks if capital investments don't yield expected returns.

Earnings Decline

Declining earnings per share may signal challenges in maintaining profitability, affecting investor confidence and future growth prospects.

High Debt Levels

High debt levels can increase financial risk and interest obligations, potentially impacting long-term financial stability and growth capacity.

Towa Pharmaceutical Co Business Overview & Revenue Model

Company Description

Towa Pharmaceutical Co., Ltd. (4553) is a Japan-based company primarily engaged in the pharmaceutical industry. The company focuses on the development, manufacturing, and marketing of generic pharmaceuticals, as well as ethical drugs. Towa operates in several therapeutic areas, including cardiovascular, oncology, and infectious diseases, providing a range of products to healthcare providers and patients. The company also invests in research and development to enhance its product offerings and expand its market presence in both domestic and international markets.

How the Company Makes Money

Towa Pharmaceutical generates revenue primarily through the sale of generic drugs and ethical pharmaceuticals. Its revenue model is largely based on producing high-quality, cost-effective medications that cater to the needs of healthcare providers and patients. Key revenue streams include the sale of prescription medications, which account for a significant portion of its earnings. Additionally, Towa collaborates with healthcare organizations and other pharmaceutical companies for product development and distribution, which can lead to licensing agreements and joint ventures that further enhance its revenue. The company's focus on R&D allows it to expand its product portfolio, thereby increasing market share and driving sales growth. Factors contributing to its earnings include the rising demand for generic medications, strategic partnerships, and an emphasis on innovation in pharmaceutical formulations.

Towa Pharmaceutical Co Financial Statement Overview

Summary

Towa Pharmaceutical Co shows strong revenue and profit growth with effective cost management. However, negative free cash flow due to high capital expenditures poses a risk to long-term financial stability. Moderate leverage is manageable but requires careful 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 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	266.67B	259.59B	227.93B	208.86B	165.62B	154.90B
Gross Profit	97.02B	94.73B	81.38B	72.71B	70.19B	65.45B
EBITDA	51.12B	48.05B	35.54B	25.14B	29.49B	29.34B
Net Income	20.64B	18.99B	16.17B	2.20B	15.91B	13.96B
Balance Sheet
Total Assets	480.53B	470.82B	430.65B	371.35B	329.94B	245.67B
Cash, Cash Equivalents and Short-Term Investments	49.58B	45.47B	29.65B	24.26B	32.83B	22.91B
Total Debt	236.26B	232.37B	202.36B	173.06B	144.13B	84.77B
Total Liabilities	300.67B	299.19B	274.76B	234.45B	197.77B	129.07B
Stockholders Equity	179.86B	171.63B	155.89B	136.89B	132.17B	116.60B
Cash Flow
Free Cash Flow	-1.13B	-5.33B	-31.11B	-27.93B	8.55B	2.13B
Operating Cash Flow	28.84B	23.40B	8.21B	2.54B	22.13B	12.01B
Investing Cash Flow	-33.81B	-31.29B	-40.39B	-30.28B	-59.73B	-9.10B
Financing Cash Flow	11.62B	21.57B	35.41B	17.48B	46.54B	184.00M

Towa Pharmaceutical Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3665.00
• 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:4553, the sentiment is Positive. The current price of 3665 is above the 20-day moving average (MA) of 3369.25, above the 50-day MA of 3075.78, and above the 200-day MA of 2920.16, indicating a bullish trend. The MACD of 168.55 indicates Negative momentum. The RSI at 82.45 is Negative, neither overbought nor oversold. The STOCH value of 90.13 is Negative, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4553	81 Outperform	¥180.37B	8.74	11.81%	2.18%	9.32%	30.85%
4521	80 Outperform	¥144.80B	210.85	0.44%	4.23%	-5.99%	-96.04%
4569	69 Neutral	¥79.91B	9.35	―	3.43%	11.65%	93.46%
4547	66 Neutral	¥188.30B	13.47	6.57%	2.49%	13.11%	41.57%
4551	65 Neutral	―	―	―	―	10.91%	2.93%
4887	63 Neutral	¥233.56B	-233.42	―	2.30%	12.78%	-105.43%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Towa Pharmaceutical Co Corporate Events

Towa Pharmaceutical Reports Strong Financial Performance for H1 2025

Towa Pharmaceutical Co., Ltd. reported its consolidated financial results for the six months ending September 30, 2025, showing a 5.7% increase in net sales compared to the previous year. Despite a slight drop in operating profit, the company experienced a significant rise in ordinary profit and profit attributable to owners of the parent, indicating strong financial performance. The company maintained its dividend forecast and showed a stable financial position with increased equity. This performance underscores Towa Pharmaceutical’s robust market positioning and potential positive implications for stakeholders.