Lawson (TSE:2651) - Share price, News & Analysis

Q: What is the Fair Price of 2651 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

2651 (¥4525) is trading above our estimate of [[fair value]] (¥3076.63)

2651 fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	2/6
Past Performance	3/6
Financial Health	4/6
Dividends	3/6

2651 Stock Overview

Lawson, Inc. operates and franchises convenience stores under the Lawson, Lawson Store 100, and Natural Lawson names in Japan, China, Thailand, Indonesia, the Philippines, and Hawaii.

Rewards

Earnings are forecast to grow 7.59% per year

Earnings grew by 106% over the past year

Risk Analysis

Unstable dividend track record

Large one-off items impacting financial results

Lawson Competitors

Kobe Bussan

TSE:3038

JP¥713.7b

YaokoLtd

TSE:8279

JP¥237.7b

Fuji

TSE:8278

JP¥187.3b

United Super Markets Holdings

TSE:3222

JP¥137.2b

Price History & Performance

Summary of all time highs, changes and price drops for Lawson
Historical stock prices
Current Share Price	JP¥4,525.00
52 Week High	JP¥6,050.00
52 Week Low	JP¥4,210.00
Beta	0.022
1 Month Change	-0.77%
3 Month Change	-2.16%
1 Year Change	-12.48%
3 Year Change	-13.81%
5 Year Change	-39.26%
Change since IPO	-18.03%

Shareholder Returns

	2651	JP Consumer Retailing	JP Market
7D	2.3%	3.2%	2.3%
1Y	-12.5%	-9.8%	-3.9%

Return vs Industry: 2651 underperformed the JP Consumer Retailing industry which returned -10.1% over the past year.

Return vs Market: 2651 underperformed the JP Market which returned -3.5% over the past year.

Price Volatility

Is 2651's price volatile compared to industry and market?
2651 volatility
2651 Average Weekly Movement	5.1%
Consumer Retailing Industry Average Movement	3.3%
Market Average Movement	4.2%
10% most volatile stocks in JP Market	8.4%
10% least volatile stocks in JP Market	2.2%

Stable Share Price: 2651 is not significantly more volatile than the rest of JP stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: 2651's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1975	10,362	Sadanobu Takemasu	https://www.lawson.co.jp

Lawson, Inc. operates and franchises convenience stores under the Lawson, Lawson Store 100, and Natural Lawson names in Japan, China, Thailand, Indonesia, the Philippines, and Hawaii. It operates through Domestic Convenience Store Business, Seijo Ishii Business, Entertainment-Related Business, Financial Services Business, and Overseas Business segments. The company’s stores provide ready-made dishes, including bento lunchboxes, rice balls, deep-fried items, and salads, as well as coffee and sweets; and over-the-counter pharmaceuticals, prescription drugs, cosmetics, and daily necessities.

Lawson Fundamentals Summary

How do Lawson's earnings and revenue compare to its market cap?
2651 fundamental statistics
Market Cap	JP¥452.83b
Earnings (TTM)	JP¥17.90b
Revenue (TTM)	JP¥698.37b

25.3x

P/E Ratio

0.6x

P/S Ratio

Is 2651 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
2651 income statement (TTM)
Revenue	JP¥698.37b
Cost of Revenue	JP¥199.74b
Gross Profit	JP¥498.63b
Other Expenses	JP¥480.73b
Earnings	JP¥17.90b

Last Reported Earnings

Feb 28, 2022

Next Earnings Date

Jul 11, 2022

Earnings per share (EPS)	178.87
Gross Margin	71.40%
Net Profit Margin	2.56%
Debt/Equity Ratio	81.5%

How did 2651 perform over the long term?

See historical performance and comparison

Dividends

3.3%

Current Dividend Yield

84%

Payout Ratio

Does 2651 pay a reliable dividends?

See 2651 dividend history and benchmarks

When do you need to buy 2651 by to receive an upcoming dividend?
Lawson dividend dates
Ex Dividend Date	Aug 30 2022
Dividend Pay Date	Nov 10 2022
Days until Ex dividend	61 days
Days until Dividend pay date	133 days

Does 2651 pay a reliable dividends?

See 2651 dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is 2651 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 2651?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 2651. This is calculated by dividing 2651's market cap by their current preferred multiple.
What is 2651's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	JP¥452.83b

2651 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.7x
Enterprise Value/EBITDA	3.6x
PEG Ratio	3.3x

Price to Earnings Ratio vs Peers

How does 2651's PE Ratio compare to its peers?

2651 PE Ratio vs Peers

The above table shows the PE ratio for 2651 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	30.8x
3038 Kobe Bussan	34.8x	11.9%	JP¥713.7b
8279 YaokoLtd	15.5x	5.8%	JP¥237.7b
8278 Fuji	47.6x	n/a	JP¥187.3b
3222 United Super Markets Holdings	25.5x	-1.8%	JP¥137.2b
2651 Lawson	25.3x	7.6%	JP¥452.8b

Forward PE

Price-To-Earnings vs Peers: 2651 is good value based on its Price-To-Earnings Ratio (25.3x) compared to the peer average (30.8x).

Price to Earnings Ratio vs Industry

How does 2651's PE Ratio compare vs other companies in the JP Consumer Retailing Industry?

Price-To-Earnings vs Industry: 2651 is expensive based on its Price-To-Earnings Ratio (25.3x) compared to the JP Consumer Retailing industry average (12.2x)

Price to Earnings Ratio vs Fair Ratio

What is 2651's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

2651 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	25.3x
Fair PE Ratio	18.6x

Price-To-Earnings vs Fair Ratio: 2651 is expensive based on its Price-To-Earnings Ratio (25.3x) compared to the estimated Fair Price-To-Earnings Ratio (18.6x).

Share Price vs Fair Value

What is the Fair Price of 2651 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 2651 (¥4525) is trading above our estimate of fair value (¥3076.63)

Significantly Below Fair Value: 2651 is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: 2651 is poor value based on its PEG Ratio (3.3x)

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Future Growth

How is Lawson forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

7.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2651's forecast earnings growth (7.6% per year) is above the savings rate (0.02%).

Earnings vs Market: 2651's earnings (7.6% per year) are forecast to grow slower than the JP market (8.9% per year).

High Growth Earnings: 2651's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2651's revenue (8.4% per year) is forecast to grow faster than the JP market (4.5% per year).

High Growth Revenue: 2651's revenue (8.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 2651's Return on Equity is forecast to be low in 3 years time (8.5%).

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Past Performance

How has Lawson performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-20.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 2651 has a large one-off loss of ¥19.5B impacting its February 28 2022 financial results.

Growing Profit Margin: 2651's current net profit margins (2.6%) are higher than last year (1.3%).

Past Earnings Growth Analysis

Earnings Trend: 2651's earnings have declined by 20.3% per year over the past 5 years.

Accelerating Growth: 2651's earnings growth over the past year (106%) exceeds its 5-year average (-20.3% per year).

Earnings vs Industry: 2651 earnings growth over the past year (106%) exceeded the Consumer Retailing industry 1.4%.

Return on Equity

High ROE: 2651's Return on Equity (6.5%) is considered low.

Discover strong past performing companies

Financial Health

How is Lawson's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 2651's short term assets (¥667.6B) do not cover its short term liabilities (¥704.7B).

Long Term Liabilities: 2651's short term assets (¥667.6B) exceed its long term liabilities (¥354.1B).

Debt to Equity History and Analysis

Debt Level: 2651 has more cash than its total debt.

Reducing Debt: 2651's debt to equity ratio has increased from 30.8% to 81.5% over the past 5 years.

Debt Coverage: 2651's debt is well covered by operating cash flow (64.6%).

Interest Coverage: 2651's interest payments on its debt are well covered by EBIT (100x coverage).

Balance Sheet

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Dividend

What is Lawson current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.31%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: 2651's dividend (3.31%) is higher than the bottom 25% of dividend payers in the JP market (1.67%).

High Dividend: 2651's dividend (3.31%) is low compared to the top 25% of dividend payers in the JP market (3.68%).

Stability and Growth of Payments

Stable Dividend: 2651's dividend payments have been volatile in the past 10 years.

Growing Dividend: 2651's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (83.9%), 2651's payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (15%), 2651's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.4yrs

Average management tenure

CEO

Sadanobu Takemasu (53 yo)

6yrs

Tenure

Mr. Sadanobu Takemasu has been the President and Chief Executive Officer at Lawson Inc. since June 1, 2016 and September 2017 respectively and also serves as CSO since 2021. He served as Division Director...

Leadership Team

Experienced Management: 2651's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.

Board Members

Experienced Board: 2651's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/29 00:00
End of Day Share Price	2022/06/29 00:00
Earnings	2022/02/28
Annual Earnings	2022/02/28