Ongoing concerns about rising vegetable oil prices: Longer-term strategy is on track with a return to sales growth overseas, but managing raw material costs will be key in near term

Research evidence excerpt

Ongoing concerns about rising vegetable oil prices: Longer-term strategy is on track with a return to sales growth overseas, but managing raw material costs will be key in near term

Global Markets Research

29 July 2026Kewpie

2809.T 2809 JP / EQUITY: JAPAN FOOD, BEVERAGES & TOBACCO

RatingOngoing concerns about rising vegetable oil

Remains Neutralprices

Target price

Longer-term strategy is on track with a return to sales growth overseas, Increased from 4,100 JPY 4,400

but managing raw material costs will be key in near term

Closing price JPY 4,678Steady progress with longer-term strategy, but concerns about near-term earnings 28 July 2026

remain

Kewpie’s 26/11 Q2 results confirmed the benefits of its initiatives to date, including the Implied upside -5.9%

success of its value-added strategy in Japan and a return to sales growth in the Americas

and China. However, we believe concerns remain over future increases in raw material

costs, particularly vegetable oil. We rate the stock Neutral and raise our target price to

¥4,400, 23x our 26/11 forecast, reflecting the rise in the average P/E for food sector Relative performance chart

companies under our coverage. We apply a premium of around 20% to the average P/E of

19x for food sector companies, as our operating profit CAGR forecast of 9% for 27/11–

30/11 is higher than the sector average of 6%.

26/11 Q2 results: Profits ahead of our forecasts

Q2 operating profits totaled ¥12.2bn (up 18% y-y). Efforts to pass on cost increases and

enhance value-added proved successful. Profit growth was driven by condiments for the

retail and food service markets, and by egg products. Overseas, sales picked up in China

and the Americas, but profits came in flat y-y because of a sharp rise in fixed costs

following the startup of a new plant.