ROHTO Pharmaceutical (4527.T): 1Q Wrap: Key points for business strategy briefing; focusing on potential for profitability improvement

In the wake of 1Q FY3/27 results, we revise our FY3/27-29 operating profit estimates for ROHTO Pharmaceutical by 0%/+1.2%/+1.7%. We raise our 12-month target price to ¥3,400 from ¥3,050, reflecting our updated earnings estimates and a change in our target P/E multiple (from 18.0X to 19.5X), mainly on our higher outlook for FY3/28 operating profit growth (to +9.2% yoy). We maintain our Buy rating on our forecast for a 3-year operating profit CAGR of +9.0% and our expectation for FY3/28 ROE of 11%, which is above the 7 HPC company average (9%). Ahead of the October 2 business strategy briefing, key points to watch include medium- to long-term numerical targets, future pricing strategy (price hike policy) and governance improvements.