Cosmetics & Personal Care Products: Wait for Re-rating Catalysts Continues, But Some Risks Seem Already Priced In

Research evidence excerpt

Cosmetics & Personal Care Products: Wait for Re-rating Catalysts Continues, But Some Risks Seem Already Priced In

Idea

June 23, 2026 08:00 PM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MCosmetics & Personal Care Products | Japan Haruka Miyake

Equity Analyst

Wait for Re-rating Catalysts Haruka.Miyake@morganstanleymufg.comJully Ussui +81 3 6836-5421

Research Associate

Jully.Akina.Ussui.Nakao@morganstanleymufg.com +81 3 6836-5408

Continues, But Some Risks

Seem Already Priced In

We update our forecasts and PT, and reiterate Kao as our Top

Cosmetics & Personal Care Products

Pick. We are still concerned about Shiseido missing guidance, but Japan

Industry View In-Line

believe the share price has corrected sufficiently, and upgrade

What’s Changed

from UW to EW. With industry valuations having fallen, we

Kao (4452.T) From To

believe downside risk is now limited for many firms, but buying Price Target ¥7,100 ¥7,200

catalysts are also sparse. Shiseido (4911.T) From To

Rating Underweight Equal-weight

Key Takeaways

With crude prices correcting, it is looking more likely that adverse impact of

higher costs on consumer goods firms will be less than we had expected.

However, drags from higher material costs are likely to persist through 1H 2027.

We continue to monitor consumer sentiment in all major regions, and deem it too

early to expect a revaluation of the industry as a whole on prospects of cost

increases receding.

Industry average P/E on next-FY forecasts is 19.1x for personal care products and

18.5x for cosmetics. Cosmetics have undergone a marked adjustment. Market

expectations have also already come down for personal care products.

Adjustment risk has lessened overall.

Even taking Jan-Mar results into account, Kao remains our Top Pick. The chemicals