Suntory Beverage & Food (2587): Maintain Neutral: Sales are growing but margin improvement is limited, with M&A key to accelerating growth

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Suntory Beverage & Food (2587): Maintain Neutral: Sales are growing but margin improvement is limited, with M&A key to accelerating growth

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

29 June 2026

Suntory Beverage & Food (2587)

Maintain Neutral: Sales are growing but margin Neutral

improvement is limited, with M&A key to 2587.T, 2587 JP

accelerating growth Price (29 Jun 26):¥4,532

▼Price Target (Dec-26):¥4,900

Prior (Dec-26):¥5,000

We lower our December 2026 price target to ¥4,900 (previously ¥5,000) and

maintain our Neutral rating. Active product development and marketing Japan Equity Research

investments have driven sales growth, but have not led to strong profit growth. We Food, Beverage, and Tobacco

cannot clearly identify any growth drivers by region and believe M&A is essential AC Satoshi Fujiwara

to accelerate growth. Disciplined M&A that leverages the company’s sound (81-3) 6736-8652

financial position would also be desirable for boosting ROE. We are waiting for an satoshi.fujiwara@jpmorgan.com

early announcement of an M&A deal. Hideto Takahashi

(81-3) 6736-8638

• Slightly lowering our profit forecasts: We trim our operating profit forecasts hideto.takahashi@jpmorgan.com

on an ongoing operations basis, factoring in the tailwind from yen depreciation JPMorgan Securities Japan Co., Ltd.

but also a smaller-than-expected impact from price hikes in the Japan business.

We forecast growth in FY2026 operating profit of +4% YoY to ¥162.5 billion

Style Exposure (+1% YoY on a constant currency basis; previous estimate: ¥164.6 billion;

guidance: ¥163.0 billion), FY2027 operating profit of +5% YoY to ¥171.2

billion (previous estimate: ¥171.7 billion), and FY2028 operating profit of

+4% YoY to ¥178.5 billion (previous estimate: ¥179.2 billion). We apply a P/E