Services / Leisure: Toei & Toei Animation: Forward Investments in F3/27 to Dampen Margins

Research evidence excerpt

Services / Leisure: Toei & Toei Animation: Forward Investments in F3/27 to Dampen Margins

UpdateM

Toei: Pullback from strong trends in domestic film market last year, but

overall we see upside to company plan

Alongside Toei Animation’s expected profit decline, F3/27 is likely to see a reactionary

slowdown in the entertainment-related and construction interior businesses following

strong trends the domestic film market last year. On the other hand, demand supported

by adult fans, including events and merchandising for Kamen Rider, will likely remain

robust, while the renewed reopening of Toei Kyoto Studio Park is also likely to contribute

to earnings growth.

Kamen Rider IP strategy ramping up: On a medium- to long-term timeline, growth

initiatives for the core IP Kamen Rider business are expected to ramp up from this year. In

April 2026, the 55th anniversary of Kamen Rider, the company announced three new

Kamen Rider film labels. These are aimed at re-engaging existing fans, attracting new

audiences, and expanding global reach.

Valuation: We apply a P/E multiple of 21x, referencing the average P/E since F3/24

following the announcement of the Long-Term Vision 2033. Based on F3/27 EPS of ¥274,

we set a target price of ¥5,700 and maintain our EW rating.

Toei Animation: This year we expect lower OPM due to forward

investments

Upside to guidance: The widest divergence between our forecasts and the company’s plan

lies in overseas content within the film production and distribution business. The company

is guiding for a decline in sales, factoring in uncertainties such as large contract renewals

influenced by political and economic conditions. In China, even considering trends such as

the growing popularity of short-form content (including AI-generated videos) and a shift