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Japan Tobacco Inc 2914

Morningstar Rating
JPY 4,484.00 +3.00 (0.07%)
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Company Report

Japan Tobacco Pricing Stayed Resilient; RRP Share Marched Amid Fierce Price Competition

Japan Tobacco, or JT, aims to achieve mid- to high-single-digit profit growth through global expansion, investment in reduced-risk products, or RRP, and optimization of its global manufacturing footprint over the mid to long run. Regaining share at home by expanding its heated tobacco lineups while continually increasing its overseas presence through combustibles and RRP will be key to attaining its target.

Price vs Fair Value

2914 is trading at a 644% premium.
Price
JPY 4,481.00
Fair Value
JPY 8,774.00
Uncertainty
Medium
1-Star Price
JPY 1,869.00
5-Star Price
JPY 3,959.00
Economic Moat
Hdx
Capital Allocation
Pjqgqhyx

Bulls Say, Bears Say

Bulls

Integration of the domestic tobacco business into JTI has enhanced JT’s competitive position in reduced-risk products; organizational restructuring of the domestic tobacco business also frees up some resources for RRP marketing and R&D investment.

Bears

A rapid and sizable volume decline in lucrative domestic combustible cigarette sales is unlikely to be fully offset by expansion of reduced-risk products and overseas growth.

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Trading Information

Previous Close Price
JPY 4,481.00
Day Range
JPY 4,475.004,510.00
52-Week Range
JPY 2,997.004,622.00
Bid/Ask
JPY 4,483.00 / JPY 4,487.00
Market Cap
JPY 7.96 Tril
Volume/Avg
3.3 Mil / 4.8 Mil

Key Statistics

Price/Earnings (Normalized)
15.08
Price/Sales
2.73
Dividend Yield (Trailing)
4.33%
Dividend Yield (Forward)
4.33%
Total Yield
4.33%

Company Profile

Japan Tobacco is the third-largest tobacco company globally. It owns a rich brand portfolio including Winston (non-US), Camel (non-US), and Mevius, and holds leading shares in many core markets including Japan, Russia, and the UK. It has added Logic as a vaping brand and Ploom heated tobacco lines into its reduced-risk-product portfolio. The tobacco business contributes 90% of group sales and nearly all profits, with more than half generated by the overseas tobacco operations. JTI was created through the acquisition of R.J. Reynolds' non-US operations in 1999 and further expanded through multiple acquisitions, of which the purchase of Gallaher in 2007 was the most notable, doubling JTI’s sales. Pharmaceutical and processed food operations are the other businesses.
Sector
Consumer Defensive
Industry
Tobacco
Stock Style Box
Large Value
Total Number of Employees
61,432

Competitors

Valuation

Metric
2914
IMBBY
PM
Price/Earnings (Normalized)
15.087.5416.65
Price/Book Value
1.993.89
Price/Sales
2.730.574.41
Price/Cash Flow
12.396.6014.89
Price/Earnings
2914
IMBBY
PM

Financial Strength

Metric
2914
IMBBY
PM
Quick Ratio
0.850.270.41
Current Ratio
1.830.640.94
Interest Coverage
7.263.097.42
Quick Ratio
2914
IMBBY
PM

Profitability

Metric
2914
IMBBY
PM
Return on Assets (Normalized)
7.08%8.68%14.54%
Return on Equity (Normalized)
12.91%46.93%
Return on Invested Capital (Normalized)
10.63%21.76%25.19%
Return on Assets
2914
IMBBY
PM
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Economic Moat
Market Cap
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JAPAF
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