Canopy Growth stock tumbles after announcing $200 million share sale plan
On Friday, UBS analysts downgraded DyDo Group Holdings Inc (2590:JP) from Neutral to Sell, significantly lowering the price target from JPY3,200.00 to JPY2,100.00. The downgrade follows a review of the company’s first-quarter results, which led to a substantial reduction in earnings per share (EPS) estimates for the fiscal years 2026 to 2028.
The analysts cited a rapidly changing business environment that DyDo has struggled to keep pace with as a key reason for the downgrade. They noted that the company’s vending machine segment has been particularly hard hit, with consumers growing weary of repeated price hikes. This consumer fatigue has led to a significant decrease in volumes, to the extent that vending machines will not be included in the price increases set for October 2025.
UBS forecasts ongoing operating losses in DyDo’s domestic beverage operations, estimating these to be in the range of ¥2.1 billion to ¥2.8 billion. The analysts also expressed concern that, in an extreme situation, the company’s stock multiples could drop below the historical low end.
The analysts suggested that the upcoming second-quarter results could serve as a catalyst for further reflection on the company’s position. They emphasized that if no improvements are observed as the peak season approaches, investors might become more acutely aware of the challenges facing DyDo, which currently holds the third-place position in the vending machine market.
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