By Jason Chau
Japanese food giant Ajinomoto's stock skyrocketed on Friday after the company posted better-than-expected earnings and guided for higher profits.
Shares of Ajinomoto, famous for inventing food seasoning MSG, closed more than 13% higher. That is its biggest single-day percentage gain since Oct. 1990, according to LSEG data.
The stock rallied after Ajinomoto posted an 8.9% rise in net profit for the nine months ended in December, and upgraded its earnings outlook for the fiscal year ending March 2026. The company now expects profit to jump 85%.
Shares of Ajinomoto and other Japanese consumer-staples companies have gotten a boost from a proposal by the country's prime minister to suspend the sales tax on food and beverages.
Ajinomoto's stock has gained almost 24% so far this year, significantly outpacing the benchmark Nikkei 225 index, which grew 6.9% in the same period.
Analysts expect sales to keep climbing and are upbeat on the company's outlook.
"We are confident that Ajinomoto will maintain its robust margins amid inflation leveraging its pricing power," Morningstar director Kazunori Ito said in a note.
Morningstar raised its sales projections for Ajinomoto after the results, citing considerable growth in its secondary functional materials business, which suggests an ability to capitalize on massive artificial intelligence demand.
Bernstein analysts also remain bullish on the company, saying it is likely to continue raising food prices in the coming quarters.
"We see strong prospects for further buybacks given this earnings momentum," they said in a report.
Write to Jason Chau at jason.chau@wsj.com
(END) Dow Jones Newswires
02-06-26 0416ET
