Suntory (TSE:2587): Assessing Valuation After Updated 2025 Financial Guidance

Suntory Beverage & Food (TSE:2587) released updated guidance for its fiscal year ending December 2025, outlining new expectations for revenue, operating income, profit, and basic earnings per share. These updates typically signal fresh insights for investors.

See our latest analysis for Suntory Beverage & Food.

Suntory Beverage & Food’s latest guidance refresh comes after a steady run. While the share price recently slipped 1.3% in a day, its 5.8% gain over the past three months hints at shifting market optimism. Looking at the bigger picture, long-term investors have seen a 38.5% total shareholder return over five years, even with a modest dip of 0.9% in the past year. This demonstrates both momentum and resilience through market cycles.

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With recent gains and a refreshed outlook now on the table, investors might wonder if Suntory Beverage & Food is trading at a compelling value or if the market has already accounted for its future progress.

Price-to-Earnings of 17.7x: Is it justified?

At a price-to-earnings (P/E) ratio of 17.7x and a recent closing price of ¥4,903, Suntory Beverage & Food looks attractively valued in comparison to both its industry and peers.

The P/E ratio measures how much investors are paying today for each yen of reported earnings. For established beverage companies, a moderate P/E typically reflects stable earnings and steady, but not extraordinary, growth prospects.

Given that Suntory Beverage & Food’s P/E is below the Asian Beverage industry average of 19.4x and well under the peer average of 26.3x, the market appears to be underpricing the company’s ability to deliver returns relative to its competition. Even our fair price-to-earnings ratio estimate comes in higher at 21.9x. This suggests there is meaningful room for the stock’s valuation to move up as profitability or sentiment improves.

Explore the SWS fair ratio for Suntory Beverage & Food

Result: Price-to-Earnings of 17.7x (UNDERVALUED)

However, sustained profitability is not guaranteed, as unpredictable consumer trends or regulatory changes could present challenges for Suntory Beverage & Food’s growth trajectory.

Find out about the key risks to this Suntory Beverage & Food narrative.

Another View: What Does the DCF Model Reveal?

While traditional valuation ratios point to Suntory Beverage & Food being undervalued, our DCF model goes even further. According to the DCF approach, the shares are trading at a significant 56.9% discount to their estimated fair value. Could this larger gap highlight a bigger opportunity, or is the market cautious for good reason?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Suntory Beverage & Food for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 900 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Suntory Beverage & Food Narrative

Feel free to dig into the numbers and test your own assumptions, shaping a unique view on where Suntory Beverage & Food stands. In just minutes, you can form your own perspective: Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Suntory Beverage & Food.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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