Daiichi Sankyo Earnings: Results in Line, Enhertu Momentum Continues; Shares Undervalued

Narrow-moat Daiichi Sankyo’s third-quarter earnings were in line with our expectations. Despite its change in development strategy for recently approved Datroway (formerly known as Dato-DXd), we think the company's midterm target of JPY 2.1 trillion in 2025 remains within reach. However, it depends on the continued momentum of Enhertu, which remains strong so far. We expect multiple key data readouts this calendar year and maintain our fair value estimate of JPY 5,500 per share. We think shares are undervalued at the current market price.