Morinaga Milk Industry (2264) Maintaining Overweight: Costs likely to rise, but strong whey market prices to support earnings

Research evidence excerpt

Morinaga Milk Industry (2264) Maintaining Overweight: Costs likely to rise, but strong whey market prices to support earnings

J P M O R G A N Asia Pacific Equity Research

27 May 2026

Morinaga Milk Industry (2264) Overweight

2264.T, 2264 JP

Maintaining Overweight: Costs likely to rise, but strong Price (27 May 26):¥4,731

whey market prices to support earnings Price Target (Dec-26):¥5,700

We maintain our Overweight rating and our December 2026 price target of ¥5,700. Japan Equity Research

We lower our FY2026 earnings estimates to reflect higher costs (mainly for

Food, Beverage, and Tobacco

packaging materials) associated with the deteriorating Middle East situation.

However, we expect operating profit to grow at an annual average of 9% from Satoshi Fujiwara AC

FY2025 to FY2028, assuming strong whey market prices and price hikes to offset (81-3) 6736-8652

satoshi.fujiwara@jpmorgan.com

cost increases starting in 2H FY2026. We expect the momentum in whey market

Hideto Takahashi

prices to stay strong thanks to tight supply and demand. (81-3) 6736-8638

• Details of earnings estimates: We revise our operating profit estimates, hideto.takahashi@jpmorgan.comJPMorgan Securities Japan Co., Ltd.

factoring in higher costs associated with the Middle East situation, price hikes

to offset higher costs, and strong whey market prices. We lower our operating

profit estimates for FY2026 from ¥39.6 billion to ¥36.2 billion (+5% YoY; Key Changes (FYE Mar)

guidance ¥32 billion) and for FY2027 from ¥41.5 billion to ¥41.1 billion Prev Cur Δ

Adj. EPS - 27E (¥) 336.05 291.12 -13.4%

(+14% YoY). For FY2028, we estimate ¥44.9 billion, or +9% YoY, above the Adj. EPS - 28E (¥) 359.63 334.03 -7.1%

5% YoY average we estimate for the 22 food stocks we cover. We base our price