Daiichi Sankyo Company (4568) AI Stock Analysis

• Market Cap: ¥6.83T
• Dividend Yield: 1.64%
• Average Volume (3M): 5.23M
• Price to Earnings (P/E): 23.4
• Beta (1Y): 0.82
• Revenue Growth: 17.77%
• EPS Growth: 49.34%
• Country: JP
• Employees: 18,726
• Sector: Healthcare
• Sector Strength: 37
• Industry: Drug Manufacturers - General
• EPS (TTM): 46.31
• Shares Outstanding: 1,894,350,600
• 10 Day Avg. Volume: 5,079,700
• 30 Day Avg. Volume: 5,225,700
• PEG Ratio: 1.12
• Price to Book (P/B): 4.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -108.82
• 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: ¥5,669.86
• Price Target Upside: 54.66% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 68 Neutral
• Price Target: ¥3,918.00 ▲(6.87%Upside)

Daiichi Sankyo's strong financial performance, characterized by robust revenue growth and financial stability, is the primary driver of its stock score. However, the technical indicators suggest caution due to a potential nearing of overbought conditions. The valuation is reasonable, but the negative Free Cash Flow is a concern for future financial flexibility.

Positive Factors

Corporate Confidence

A recent JPY200Bn-buyback was conducted in defiance of the weak stock price, indicating confidence in the company's corporate value.

Drug Development

Advancing to Enhertu’s filing for 1L HER2+ BC with strong DB09 interim data shows promising progress in drug development.

FDA Approval

FDA has approved anticancer candidate Dato-DXd for breast cancer, which is considered a positive surprise by the market.

Negative Factors

Disappointing Study Data

Daiichi's shares have declined by about 1/3 since the company reported disappointing Ph2 data from the TROPION-Lung01 study.

Stock Decline

Daiichi's shares have declined by about 1/3 since the company reported disappointing data from a lung cancer study.

Daiichi Sankyo Company Business Overview & Revenue Model

Company Description

Daiichi Sankyo Company, Limited researches and develops, manufactures, imports, markets, and sells pharmaceutical products worldwide. The company offers trastuzumab deruxtecan, an anti-cancer agent and anti-HER2 antibody drug conjugate; mirogabalin for pain treatment; teneligliptin/canagliflozin for type 2 diabetes mellitus treatment; lacosamide anti-epileptic agent; prasugrel, an antiplatelet agent; denosumab for osteoporosis and bone disorders; teneligliptin for type 2 diabetes mellitus treatment; edoxaban, an anticoagulant; esomeprazole for ulcer treatment; memantine for treating Alzheimer's disease; and laninamivir for anti-influenza treatment. It also provides olmesartan, an antihypertensive agent; levofloxacin, an antibacterial agent; pravastatin for hypercholesterolemia treatment; and loxoprofen, an anti-inflammatory analgesic. In addition, the company offers colesevelam for treating hypercholesterolemia and type 2 diabetes mellitus treatment; and ferric carboxymaltose and iron sucrose injections for treating anemia. Further, it provides Lulu, a combination cold remedy; Loxonin S, an antipyretic analgesic /anti-inflammatory analgesic; Transino for melasma improvement and treating against spots and freckles; Minon, a skincare product; and Breath Labo and Clean Dental oral care products, as well as Silodosin for dysuria; Gefitinib for malignant tumours; Bicalutamide for prostate cancer; and Tamoxifen, an anti-breast cancer agent. Additionally, the company offers adsorbed cell culture-derived influenza, influenza HA, measles rubella combined, and mumps vaccines. It also provides pharmaceuticals and drugs for animals, cosmetics, medical equipment, food products, drinking water, active pharmaceutical ingredients, and intermediates. It has collaboration with Guardant Health to develop Guardant360 CDx as a companion diagnostic for Enhertu in advanced metastatic non-small cell lung cancer. The company was founded in 1899 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Daiichi Sankyo generates revenue through the research, development, manufacturing, and sale of pharmaceutical products. The company's revenue model is centered around its portfolio of patented drugs, which are sold globally. Key revenue streams include sales of prescription medications, especially in the oncology and cardiovascular segments, which are among the fastest-growing areas in the pharmaceutical industry. Additionally, Daiichi Sankyo engages in strategic partnerships and collaborations with other pharmaceutical companies to enhance its research capabilities and expand its market presence. These partnerships often involve co-development and co-marketing agreements, which contribute to the company's earnings by leveraging shared resources and expertise. Moreover, the company invests in research and development to continuously innovate and bring new drugs to market, which is crucial for maintaining its competitive edge and sustaining long-term revenue growth.

Daiichi Sankyo Company Financial Statement Overview

Summary

Daiichi Sankyo exhibits strong financial performance with robust revenue growth and efficient cost management. The balance sheet reflects financial stability and conservative leverage, reducing financial risk. However, negative Free Cash Flow raises concerns about cash management and future financial flexibility.

Income Statement

Daiichi Sankyo demonstrated robust revenue growth, with a significant increase from 1.28 trillion to 1.89 trillion JPY over the past year, showing a positive growth trajectory. The Gross Profit Margin remains strong, reflecting efficient cost management. EBIT and EBITDA margins have improved, indicating better operational efficiency. However, the Net Profit Margin slightly decreased due to higher costs, which should be monitored.

Balance Sheet

The company maintains a solid equity position with a high Equity Ratio, suggesting financial stability. The Debt-to-Equity Ratio is low, indicating conservative use of leverage, which reduces financial risk. Return on Equity is strong, reflecting effective use of shareholders' funds to generate profits. Overall, the balance sheet presents a stable financial foundation.

Cash Flow

Operating Cash Flow to Net Income Ratio indicates a healthy conversion of income into cash. However, Free Cash Flow has turned negative, mainly due to significant capital expenditures. This could impact future financial flexibility if not managed properly. The Free Cash Flow to Net Income Ratio has worsened, indicating potential liquidity challenges.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.89T	1.60T	1.28T	1.04T	962.52B
Gross Profit	1.47T	1.19T	914.95B	691.56B	624.23B
EBITDA	434.68B	305.46B	169.72B	143.05B	121.18B
Net Income	295.76B	200.73B	109.19B	66.97B	75.96B
Balance Sheet
Total Assets	3.46T	3.46T	2.51T	2.22T	2.09T
Cash, Cash Equivalents and Short-Term Investments	639.84B	876.56B	825.13B	843.85B	824.91B
Total Debt	101.33B	156.00B	143.09B	163.46B	183.83B
Total Liabilities	1.83T	1.77T	1.06T	870.53B	813.13B
Stockholders Equity	1.62T	1.69T	1.45T	1.35T	1.27T
Cash Flow
Free Cash Flow	-62.42B	476.47B	47.15B	62.54B	128.11B
Operating Cash Flow	53.84B	599.26B	114.51B	139.23B	192.21B
Investing Cash Flow	334.17B	-282.64B	-257.78B	212.34B	-39.25B
Financing Cash Flow	-377.77B	-123.56B	-89.59B	-86.23B	-202.43B

Daiichi Sankyo Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3666.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4568, the sentiment is Positive. The current price of 3666 is above the 20-day moving average (MA) of 3361.60, above the 50-day MA of 3505.56, and below the 200-day MA of 3945.74, indicating a neutral trend. The MACD of 43.87 indicates Negative momentum. The RSI at 64.32 is Neutral, neither overbought nor oversold. The STOCH value of 88.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4568.

Daiichi Sankyo Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4568	68 Neutral	¥6.83T	23.37	17.60%	1.64%	17.77%	49.34%
Sector *	52 Neutral	$7.61B	0.10	-63.03%	2.08%	16.34%	0.32%
ALPMF	―	$18.20B	53.87	3.22%	0.50%	―	―
CHGCF	―	$80.20B	28.50	22.80%	0.05%	―	―
OTSKF	―	$24.75B	9.96	13.46%	0.04%	―	―
SGIOF	―	$15.18B	12.33	12.99%	0.17%	―	―
TKPHF	―	$47.19B	61.82	1.50%	0.14%	―	―