Fact based stock research
Chugai Pharmaceutical (TSE:4519)

JP3519400000

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Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Chugai Pharmaceutical stock research in summary

chugai-pharm.co.jp

ANALYSIS: With an Obermatt Combined Rank of 48 (worse than 52% compared with investment alternatives), Chugai Pharmaceutical (Pharmaceuticals, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Chugai Pharmaceutical are low in value (priced high) with a consolidated Value Rank of 16 (worse than 84% of alternatives) and show below-average growth (Growth Rank of 48) but are safely financed (Safety Rank of 82), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 48, is a hold recommendation based on Chugai Pharmaceutical's financial characteristics. As the company Chugai Pharmaceutical's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 16) and low growth (Obermatt Growth Rank of 48), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 82) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	16
Growth Rank	48
Safety Rank	82
Combined Rank	48

Country	Japan
Industry	Pharmaceuticals
Index	TOPIX 100, Renewables Users, Nikkei 225
Size class	X-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Chugai Pharmaceutical

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	47	35	20	16
GROWTH
GROWTH	61	23	37	48
SAFETY
SAFETY	77	78	84	82
SENTIMENT
SENTIMENT	n/a	58	70	^new
360° VIEW
360° VIEW	n/a	41	51	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Chugai Pharmaceutical is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	47	35	20	16
GROWTH
GROWTH	61	23	37	48
SAFETY
SAFETY	77	78	84	82
COMBINED
COMBINED	70	45	39	48

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Chugai Pharmaceutical the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 16 (worse than 84% compared with alternatives), Chugai Pharmaceutical shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Chugai Pharmaceutical. Price-to-Sales is 10 which means that the stock price compared with what market professionals expect for future profits is higher than 90% of comparable companies, indicating a low value concerning Chugai Pharmaceutical's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 14, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Chugai Pharmaceutical. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 32 and Dividend Yield, which is lower than 57% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 16, is a sell recommendation based on Chugai Pharmaceutical's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Chugai Pharmaceutical? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Chugai Pharmaceutical? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Chugai Pharmaceutical may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	28	24	11	10
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	65	60	33	32
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	15	18	14	14
DIVIDEND YIELD
DIVIDEND YIELD	75	70	49	43
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	47	35	20	16

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Chugai Pharmaceutical; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 48 (better than 48% compared with alternatives), Chugai Pharmaceutical shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Chugai Pharmaceutical. Sales Growth has a below market rank of 18, which means that, currently, professionals expect the company to grow less than 82% of its competitors. The same is valid for Capital Growth, with a rank of 43, and Profit Growth, with a rank of 46. Currently, professionals expect the company to grow its profits less than 54% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 92, which means that the stock returns have recently been above 92% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 48, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Chugai Pharmaceutical, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	68	33	13	18
PROFIT GROWTH
PROFIT GROWTH	45	69	26	46
CAPITAL GROWTH
CAPITAL GROWTH	n/a	48	42	43
STOCK RETURNS
STOCK RETURNS	33	15	95	92
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	61	23	37	48

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Chugai Pharmaceutical.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 82 (better than 82% compared with alternatives) for 2024, the company Chugai Pharmaceutical has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Chugai Pharmaceutical is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Chugai Pharmaceutical. Leverage is at a rank of 87, meaning the company has a below-average debt-to-equity ratio. It has less debt than 87% of its competitors. Liquidity is also good at a rank of 100, meaning the company generates more profit to service its debt than 100% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 32, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 68% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 82 (better than 82% compared with alternatives), Chugai Pharmaceutical has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Chugai Pharmaceutical. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Chugai Pharmaceutical and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	63	80	87	87
REFINANCING
REFINANCING	33	29	33	32
LIQUIDITY
LIQUIDITY	100	98	100	100
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	77	78	84	82

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Chugai Pharmaceutical and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	37	63	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	60	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	96	60	^new
MARKET PULSE
MARKET PULSE	n/a	24	56	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	58	70	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Chugai Pharmaceutical.
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