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On Friday, JPMorgan initiated coverage of Calbee stock, a leading Japanese snack food manufacturer, with an Underweight rating and a price target of ¥2,800. The investment firm acknowledged Calbee's strong brand presence and product appeal within its domestic market of Japan, noting the success stemming from strategic brand investments and robust sales figures.
Calbee's efforts in optimizing its value chain through digital transformation were also highlighted by JPMorgan, which could streamline operations and potentially enhance profitability. The company's increasing geographical diversity in its overseas operations was recognized as a positive step towards reducing dependency on any single market for its earnings.
Despite these strengths, JPMorgan pointed to the upcoming commencement of operations at the Setouchi Hiroshima Plant in the fourth quarter of 2025 as a significant factor that could place a temporary strain on the company's financials. The investment firm anticipates that the costs associated with this new plant will impact Calbee's profits for the fiscal year 2025.
The analyst from JPMorgan concluded that due to the expected investment burden from the new plant, Calbee's share price might face downward pressure in the near term. This assessment forms the basis for the Underweight rating, suggesting a cautious stance on the stock's performance for the time being.
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