Calbee (2229) Still Underweight: Offsetting cost growth with price hikes, but valuations high

Research evidence excerpt

Calbee (2229) Still Underweight: Offsetting cost growth with price hikes, but valuations high

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

03 July 2026

Calbee (2229) Underweight

2229.T, 2229 JP

Still Underweight: Offsetting cost growth with price Price (02 Jul 26):¥2,982

hikes, but valuations high Price Target (Dec-26):¥2,600

We maintain our December 2026 price target of ¥2,600 and our Underweight Japan Equity Research

rating. We expect cost inflation, including the impact of the Middle East conflict,

Food, Beverage, and Tobacco

to weigh on earnings in the short term, but as we expect higher costs to be offset

by price hikes, we make only minor revisions to our FY2027 profit estimates. Our Satoshi Fujiwara AC

price target is based on a fair-value P/E of 16x on our FY2027 EPS estimate. The (81-3) 6736-8652

satoshi.fujiwara@jpmorgan.com

shares are currently trading at a P/E of 19x on our FY2027 estimate, above the 16x

Hideto Takahashi

average for the 22 food companies in our coverage (based on our estimates), so we (81-3) 6736-8638

view the shares as overvalued. hideto.takahashi@jpmorgan.com

JPMorgan Securities Japan Co., Ltd.

• We forecast FY2026 operating profit growth of 2% YoY to ¥26.6 billion. We

lower our forecast slightly from our previous estimate of ¥27.2 billion to reflect

an increase in overseas investment (guidance ¥26.2 billion). In Japan, sales of Style Exposure

potato chips and JagaRico were weak through May due to a poor potato harvest

in Hokkaido, but we expect sales to recover from June on a switch to potatoes

produced in Kyushu. We expect costs to increase due to the Middle East

conflict, but believe this can be generally offset by raising prices. Overseas,

Calbee plans to increase marketing investment when releasing new products