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Japan Tobacco Inc 2914 Stock Quote

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Morningstar‘s Stock Analysis 2914

Currency in JPY
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Is it the right time to buy or sell?

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Continued Pricing Strength and Currency Tailwinds Lifting JT's Profits; Russia Remains a Risk

Jeanie Chen Senior Equity Analyst

Analyst Note

| Jeanie Chen |

It is not surprise that wide-moat Japan Tobacco, or JT, revised up the full-year guidance thanks to continued strength in pricing effects, resilient overseas tobacco volume, in addition to favorable currency movement. The second-quarter currency-neutral sales rose 3.6% (reported 14.8% growth) year on year with adjusted operating profits (AOP) up 11.4% (reported 22% growth). The results again validate our thesis that strong pricing, a product of its moat underpinned by brand equity, will continue to lift JT’s midterm profits. On the other hand, uncertainty surrounding Russia operations remains as management continues to evaluate options for the Russia business.

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Key Statistics 2914

Company Profile 2914

Business Description

Japan Tobacco is the third-largest tobacco company globally. It owns a rich brand portfolio including Winston (non-U.S.), Camel (non-U.S.), and Mevius, and holds leading shares in many core markets including Japan, Russia, and the U.K. It has added Logic as a vaping brand and Ploom/PloomTech heated tobacco lines into its reduced-risk-product portfolio. The tobacco business contributes 90% of group sales and nearly all profits, with more than half generated by JTI, the overseas tobacco arm. JTI was created through the acquisition of R.J. Reynolds' non-U.S. operations in 1999 and further expanded through multiple acquisitions, of which the purchase of Gallaher in 2007 was the most notable, doubling JTI’s sales. Pharmaceutical and processed food operations are the other businesses.

2-1, Toranomon 2-chome, Minato-ku
Tokyo, 105-8422, Japan
T +81 335823111
Industry Tobacco
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 31, 2021
Stock Type
Employees 62,323