Food: Earnings Outlook (Apr-Jun) Poised to fight back against earlier rise in costs; expect environment to improve from 2H FY2026 to FY2027

Research evidence excerpt

Food: Earnings Outlook (Apr-Jun) Poised to fight back against earlier rise in costs; expect environment to improve from 2H FY2026 to FY2027

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

09 July 2026

Food: Earnings Outlook (Apr-Jun)

Poised to fight back against earlier rise in costs; expect

environment to improve from 2H FY2026 to FY2027

Food sector earnings are likely to be sluggish in the short term due to rising costs Japan Equity Research

for packaging and other materials amid the conflict in the Middle East (including

Food, Beverage, and Tobacco

Iran). However, we expect several companies to revise prices, starting with

Yamazaki Baking in July, and look for progress in offsetting higher costs from 2H Satoshi Fujiwara AC

FY2026. We need to watch the yen’s depreciation, but if crude oil prices stabilize, (81-3) 6736-8652

satoshi.fujiwara@jpmorgan.com

we think cost inflation for packaging and other materials could ease in FY2027 and

Hideto Takahashi

price hikes could yield benefits. In addition, we think volume is likely to recover (81-3) 6736-8638

if the consumption tax is reduced, which could lead to an improvement in the hideto.takahashi@jpmorgan.com

investment environment for the food sector from 2H FY2026 to FY2027. JPMorgan Securities Japan Co., Ltd.

• Recommended stocks: We recommend Ajinomoto (2802, OW; growth for

Ajinomoto Build-up Film and CDMO business), Kikkoman (2801, OW;

scope to revise overseas prices), Meiji Holdings (2269, OW; medium-term

profit growth scenario on restructuring and stable cocoa bean prices), and

Japan Tobacco (2914, OW; healthy sales momentum). We also highlight

Toyo Suisan Kaisha (2875, OW) on a likely increase in expectations for a

volume recovery and price hikes after 1Q results.