Otsuka Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Investors in Otsuka Corporation (TSE:4768) had a good week, as its shares rose 3.3% to close at JP¥3,617 following the release of its full-year results. The result was positive overall - although revenues of JP¥1.1t were in line with what the analysts predicted, Otsuka surprised by delivering a statutory profit of JP¥141 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Otsuka

After the latest results, the eleven analysts covering Otsuka are now predicting revenues of JP¥1.23t in 2025. If met, this would reflect a solid 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 10% to JP¥155. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.22t and earnings per share (EPS) of JP¥156 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of JP¥3,944, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Otsuka at JP¥4,400 per share, while the most bearish prices it at JP¥3,200. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Otsuka's past performance and to peers in the same industry. It's clear from the latest estimates that Otsuka's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.5% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Otsuka is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Otsuka going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Otsuka (1 can't be ignored!) that we have uncovered.

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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.