Results: Otsuka Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

A week ago, Otsuka Corporation (TSE:4768) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Otsuka beat earnings, with revenues hitting JP¥253b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 11%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Otsuka

After the latest results, the eleven analysts covering Otsuka are now predicting revenues of JP¥1.19t in 2025. If met, this would reflect a notable 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 13% to JP¥152. Before this earnings report, the analysts had been forecasting revenues of JP¥1.19t and earnings per share (EPS) of JP¥151 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥3,837. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Otsuka analyst has a price target of JP¥4,200 per share, while the most pessimistic values it at JP¥3,200. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Otsuka is an easy business to forecast or the the analysts are all using similar assumptions.

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 9.9% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.5% 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. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Otsuka to grow faster than the wider 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Otsuka analysts - going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Otsuka Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.