Kikkoman Earnings: Overseas Segment Continued to Drive Profit Growth; Retain Fair Value Estimate

Wide-moat Kikkoman reported fiscal 2024 (ending March 2024) results with both revenue and profits exceeding our estimates. Improving margins in overseas markets during the fourth quarter were the key drivers for organic profit growth, more than offsetting margin pressure in Japan. We raised our fiscal 2025 (ending March 2025) business and net profit estimates by 5% given the stronger reported numbers but left our 2026-28 forecasts unchanged. With limited earnings adjustments, we retain our fair value estimate at JPY 1,540 per share, which implies 25 times fiscal 2025 price/earnings and 13 times EV/EBITDA. We think shares remain overvalued.