Toei Animation (4816) 1Q FY3/27 results: Slightly positive, price objective maintained at ¥3,500

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Toei Animation (4816)

1Q FY3/27 results: Slightly positive, price

objective maintained at ¥3,500

Reiterate Rating: BUY | PO: 3,500 JPY | Price: 2,938 JPY

1Q results: Slightly positive, supported by strong North

American streaming performance

Operating profit for 1Q FY3/27 came in at ¥7.5bn (+13% YoY, operating margin of 34%),

exceeding our forecast of ¥6.6bn. Earnings outperformed our expectations by ¥650mn in

the Film Production and Distribution segment and ¥330mn in the Licensing segment.

Dragon Ball streaming performance in North America remained strong, driving upside in

the Film Production and Distribution business, which includes overseas streaming

revenue. Segment operating margin reached 34%, well above our forecast of 22%. While

the strong North American performance is a positive, the decline in streaming revenue

from China remains a concern. Overall, we view the results as slightly positive.

Reiterate Buy; price objective unchanged at ¥3,500

We raise our FY3/27 revenue forecast to ¥103.0bn from ¥98.7bn, while leaving our

operating profit forecast largely unchanged at ¥31.9bn versus ¥32.0bn previously. Our

estimates incorporate expected streaming revenue from THE ONE PIECE in 4Q, offset by

margin pressure from production costs associated with Dragon Ball Super: Bills, which is

scheduled to air in 2H FY3/27.

We continue to derive our price objective using a DCF methodology. By extending the

valuation period by one year, we now model FY3/27-FY3/36 and arrive at an unchanged

price objective of ¥3,500. The applied WACC remains 5.2%. Our price objective implies a

FY3/28 P/E of 25x based on our EPS forecast.

We assume the next ONE PIECE theatrical release will be launched in FY3/28. While the

earnings contribution from new IP remains difficult to assess with confidence at this

stage, we believe there is still substantial growth potential even within the company's

existing IP portfolio. Accordingly, we reiterate our Buy rating.

31 July 2026

Equity

Key Changes

(¥)

Previous

Current

2027E Rev (m)

98,700.0

103,033.0

2028E Rev (m)

117,600.0

117,710.0

2029E Rev (m)

112,700.0

111,810.0

2027E EPS

112.39

114.32

2028E EPS

146.27

140.90

2029E EPS

…