Daiichi's Third-Quarter Earnings In Line With Expectations, Crucial Data Readouts Expected This Year

Narrow-moat Daiichi Sankyo’s fiscal third quarter was in line with our expectations. Revenue and operating profit for the third quarter were JPY 340 billion and JPY 32 billion, respectively, which is in line with management’s guidance in October. Although the company gave revised guidance, full-year revenue and core operating profit remain unchanged at JPY 1.25 trillion and JPY 120 billion, respectively. Despite upward revisions to Enhertu forecasts due to stronger-than-expected sales ramp-up in the U.S. and Europe, this was mostly offset by lower guidance for the Japan Business Unit. Our fair value estimate remains unchanged at JPY 5,200 per share, and we think shares are attractive.