Japan Tobacco (2914) Still core recommendation in food sector: Increased probability of profit, dividend growth; improved transparency

Research evidence excerpt

Japan Tobacco (2914) Still core recommendation in food sector: Increased probability of profit, dividend growth; improved transparency

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

29 May 2026

Japan Tobacco (2914)

Still core recommendation in food sector: Increased Overweight

probability of profit, dividend growth; improved 2914.T, 2914 JP

transparency Price (28 May 26):¥6,098

▲Price Target (Dec-26):¥7,300

Prior (Dec-26):¥6,700

In the food sector, there are concerns about cost inflation and food inflation on the

back of the worsening situation in the Middle East. On the other hand, the impact Japan Equity Research

of cost increases is limited in the tobacco industry, and demand remains firm even Food, Beverage, and Tobacco

when prices rise. In this environment, the company has good market share AC Satoshi Fujiwara

momentum, strong pricing power, and high growth potential. We also expect an (81-3) 6736-8652

upward revision to FY2026 earnings and DPS guidance with 1H results. Based on satoshi.fujiwara@jpmorgan.com

1Q results, we revise our profit forecasts upward, and raise our price target from Hideto Takahashi

¥6,700 to ¥7,300. JT remains our core recommendation in the food sector. (81-3) 6736-8638

hideto.takahashi@jpmorgan.com

JPMorgan Securities Japan Co., Ltd.

• In order to better reflect share price formation in the tobacco industry and JT’s

positioning within the sector, we switch to a valuation methodology based on

EV/EBITDA multiple comparison to industry peers (previously we used Style Exposure

historical ROE-PBR correlation). Because balance sheet structures differ

between companies, we now base our valuation on EV/EBITDA rather than

PER. Our price target of ¥7,300 derives from a multiple of 12x based on our

FY2026 forecasts.