Takeda’s Q3 Earnings in Line, Guidance Revised Upward; Fair Value Estimate Unchanged

Narrow-moat Takeda’s third-quarter results were in line with expectations. Revenue for the quarter grew 8% year on year to JPY 901 billion, and core operating profit was flat at JPY 272 billion. Additionally, management raised full-year guidance for revenue and core operating profit by JPY 140 billion and JPY 40 billion, respectively. We think the upward revisions are due in part to the addition of 93 million booster doses of SpikeVax (50 micrograms) in its distribution agreement with Moderna and the Japanese government, of which 40%-50% might be completed in fiscal 2021 and the remainder after March 31 in fiscal 2022, as well as incremental upward revisions across business lines.