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Otsuka Holdings Co Ltd (JP:4578)
:4578

Otsuka Holdings Co (4578) AI Stock Analysis

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Otsuka Holdings Co

(OTC:4578)

72Outperform
Otsuka Holdings Co presents a strong financial performance with robust revenue growth and profitability, backed by a solid balance sheet. However, technical analysis indicates bearish trends and mixed short-term signals, which may weigh on the stock. The valuation is reasonable, providing a balanced view of potential risks and rewards. Overall, the company is well-positioned in its industry, but current market conditions suggest caution.

Otsuka Holdings Co (4578) vs. S&P 500 (SPY)

Otsuka Holdings Co Business Overview & Revenue Model

Company DescriptionOtsuka Holdings Co., Ltd. is a diversified healthcare company headquartered in Tokyo, Japan, operating primarily in the pharmaceutical, nutraceutical, and consumer products sectors. The company specializes in developing innovative solutions for unmet medical needs, with a focus on neuroscience, oncology, and cardiovascular health. In addition to its pharmaceutical offerings, Otsuka provides a range of consumer products, including nutritional supplements and functional foods, aimed at enhancing overall well-being.
How the Company Makes MoneyOtsuka Holdings Co. generates revenue through its diverse portfolio of pharmaceutical and consumer health products. The pharmaceutical division, which includes prescription medicines and medical devices, is the primary revenue driver, focusing on treatments for central nervous system disorders, oncology, and cardiovascular diseases. The company's nutraceutical division contributes significantly by offering functional foods and beverages, vitamins, and minerals aimed at promoting a healthy lifestyle. Otsuka also benefits from strategic partnerships and collaborations with other pharmaceutical companies, enhancing its research, development, and distribution capabilities. Additionally, the company invests in research and development to innovate new products and enhance its existing offerings, which is crucial for sustaining its market position and driving future growth.

Otsuka Holdings Co Financial Statement Overview

Summary
Otsuka Holdings Co exhibits a robust financial position with strong revenue growth, high profitability margins, and a solid balance sheet characterized by low leverage. The company's consistent cash flow generation underpins its financial health, supporting ongoing growth and investment. The overall financial performance is strong, with low financial risk, positioning the company well in the Drug Manufacturers industry.
Income Statement
85
Very Positive
Otsuka Holdings Co has demonstrated strong revenue growth with a 37.25% increase from 2020 to 2025. The gross profit margin for the TTM period is robust at 72.18%, and the net profit margin stands at a healthy 14.65%. EBIT and EBITDA margins for TTM are 17.89% and 22.14%, respectively, indicating efficient operational management. The company has consistently increased its revenue annually, contributing to a strong overall performance.
Balance Sheet
82
Very Positive
The balance sheet reflects a strong equity base with an increasing stockholders' equity over the years, reaching ¥2,648,194 million in the TTM period. The debt-to-equity ratio is low at 0.10, indicating low leverage. The equity ratio is high at 71.69%, showcasing the company's stability and low financial risk. The strong equity buffer provides a solid foundation for future growth.
Cash Flow
78
Positive
Otsuka Holdings Co's cash flow generation is solid, with a free cash flow growth rate of 67.91% from 2020 to 2025, reflecting efficient use of capital. The operating cash flow to net income ratio is 1.21 for TTM, indicating strong cash conversion. The free cash flow to net income ratio is 0.81, suggesting a healthy level of liquidity. Although the capital expenditures have increased, the strong cash flows provide assurance of continued investment capacity.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.33T2.02T1.74T1.50T1.42T
Gross Profit
1.67T1.41T1.17T1.00T983.08B
EBIT
323.56B139.61B220.54B154.50B198.58B
EBITDA
452.62B224.20B279.83B231.43B291.03B
Net Income Common Stockholders
343.12B121.62B133.91B125.46B148.14B
Balance SheetCash, Cash Equivalents and Short-Term Investments
426.17B513.34B489.12B430.76B401.77B
Total Assets
3.74T3.36T3.10T2.82T2.63T
Total Debt
189.38B214.19B194.16B212.45B226.08B
Net Debt
-236.79B-299.15B-277.47B-198.23B-130.77B
Total Liabilities
961.09B924.93B840.17B775.73B744.38B
Stockholders Equity
2.73T2.39T2.23T2.01T1.85T
Cash FlowFree Cash Flow
225.28B168.56B104.06B115.71B134.96B
Operating Cash Flow
354.64B283.23B211.85B228.86B232.84B
Investing Cash Flow
-268.27B-190.54B-81.58B-95.29B-99.86B
Financing Cash Flow
-186.89B-60.17B-95.47B-95.84B-104.93B

Otsuka Holdings Co Technical Analysis

Technical Analysis Sentiment
Negative
Last Price7075.00
Price Trends
50DMA
7357.82
Negative
100DMA
7767.71
Negative
200DMA
8053.26
Negative
Market Momentum
MACD
-41.36
Negative
RSI
47.89
Neutral
STOCH
55.34
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4578, the sentiment is Negative. The current price of 7075 is above the 20-day moving average (MA) of 6938.05, below the 50-day MA of 7357.82, and below the 200-day MA of 8053.26, indicating a neutral trend. The MACD of -41.36 indicates Negative momentum. The RSI at 47.89 is Neutral, neither overbought nor oversold. The STOCH value of 55.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4578.

Otsuka Holdings Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$14.17T34.5822.80%1.15%17.96%25.65%
79
Outperform
$2.63T51.433.22%5.10%19.25%294.48%
72
Outperform
$4.13T11.8313.46%1.55%14.52%156.70%
68
Neutral
$7.00T33.491.50%4.47%9.83%15.49%
65
Neutral
$1.20T20.656.83%3.72%5.63%30.61%
54
Neutral
¥382.99B-68.59%12.84%-1.34%
52
Neutral
$5.15B3.56-42.52%2.83%14.56%-0.53%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:4578
Otsuka Holdings Co
7,075.00
553.52
8.49%
JP:4506
Sumitomo Dainippon Pharma Co
964.00
548.00
131.73%
JP:4503
Astellas Pharma
1,396.00
-45.59
-3.16%
JP:4519
Chugai Pharmaceutical Co
8,219.00
3,288.03
66.68%
JP:4523
Eisai Co
4,050.00
-2,494.56
-38.12%
JP:4502
Takeda Pharmaceutical Co
4,234.00
312.71
7.97%

Otsuka Holdings Co Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q2-2024)
|
% Change Since: 4.30%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth in revenue and business profit, driven by pharmaceutical and nutraceutical segments. Forecasts have been revised upward, and there is an acquisition to further enhance drug discovery capabilities. However, there were some negatives, such as impairment losses and a decrease in certain revenues. Overall, the positive aspects significantly outweigh the negatives, indicating a strong performance and optimistic outlook.
Q2-2024 Updates
Positive Updates
Significant Revenue and Business Profit Growth
Revenue increased by 17.0% to JPY 1,108.9 billion and business profit increased by 37.8% to JPY 213.6 billion year-on-year, led by strong sales in pharmaceutical and nutraceutical businesses.
Pharmaceutical Business Success
Revenue for the pharmaceutical business increased by 17.9% year-on-year to JPY 766.7 billion, achieving 108% of the initial plan, driven by Core 2 products, ABILIFY MAINTENA, and JYNARQUE.
Strong Nutraceutical Business Performance
Revenue in the nutraceutical business grew by over 20% to JPY 271.8 billion, with significant growth in all three categories: For Women's Health (56.9%), For Climate & Environmental Risk (13%), and For Healthier Life (25.5%).
Positive Outlook and Revised Forecast
Full year revenue forecast revised up by JPY 175 billion to JPY 2,315 billion, and business profit forecast increased by JPY 60 billion to JPY 390 billion.
Acquisition for Growth
Acquisition of a company in Boston for drug discovery technology announced, aiming to enhance growth and expand capabilities.
Negative Updates
Impairment Loss Impact
Operating profit was affected by an impairment loss on AVP-786, although net profit still increased by 5.1%.
Decrease in Upfront Milestone and Royalty Revenue
Total upfront milestone and royalty revenue decreased to JPY 41.8 billion due to lower sales milestone income compared to the previous year.
AVP-786 Development Discontinued
Development of AVP-786 for agitation associated with dementia due to Alzheimer's disease was discontinued for strategic reasons.
Company Guidance
During the Q2 2024 earnings call for 4578.T, the executives provided detailed guidance reflecting significant growth in both their pharmaceutical and nutraceutical segments. Revenue increased by 17.0% year-on-year to JPY 1,108.9 billion, while business profit surged by 37.8% to JPY 213.6 billion, driven primarily by strong sales of Core 2 pharmaceutical products like ABILIFY MAINTENA and JYNARQUE, and nutraceuticals, particularly in the For Women’s Health category. Despite an impairment loss on AVP-786, net profit rose by 5.1% due to finance income. The company also revised its full-year forecast upwards, with revenue now expected to reach JPY 2,315 billion and business profit JPY 390 billion. Nutraceutical revenue saw a notable increase, achieving over a 20% growth rate to JPY 271.8 billion, fueled by the expansion of products like Bonafide and Nature Made. Additionally, the company announced plans for share repurchases amounting to JPY 50 billion as part of their shareholder return policy.

Otsuka Holdings Co Corporate Events

Otsuka Holdings Announces Change in Major Shareholders
May 7, 2025

Otsuka Holdings Co., Ltd. announced a change in its major shareholder structure due to a partial refund of shares by members of the Otsuka Founders Shareholding Fund. This adjustment has led to a slight decrease in the voting rights ratio of the major shareholder, The Nomura Trust and Banking Co., Ltd., but it will not impact the company’s management or business performance.

Otsuka Holdings Reports Strong Q1 2025 Financial Performance Amid Strategic Expansion
Apr 30, 2025

Otsuka Holdings Co., Ltd. reported a significant increase in revenue and profits for the first quarter of 2025, with revenue rising by 12.2% and operating profit by 35.2% compared to the same period in the previous year. Despite the positive financial performance, the company’s total comprehensive income saw a sharp decline of 96.9%. The company also announced the acquisition of Araris Biotech AG, indicating a strategic move to expand its scope of operations.

Otsuka Holdings Corrects Joint Venture Disclosure
Apr 28, 2025

Otsuka Holdings Co., Ltd. announced a correction to a previous disclosure regarding the establishment of a joint venture between Otsuka Pharmaceutical Factory, Inc. and ICU Medical. The correction involved an error in the stated capital of ICU Medical, which was initially reported as USD2.04 billion and has been corrected to USD2.45 million. This correction ensures accurate financial reporting and maintains transparency with stakeholders.

Otsuka Holdings Completes Treasury Share Disposal for Stock Compensation
Apr 25, 2025

Otsuka Holdings Co., Ltd. has completed the payment for the disposal of 88,340 treasury shares as part of its restricted stock compensation plan. This move is aimed at aligning the interests of its directors with those of the company, potentially impacting its governance and stakeholder relations positively.

Otsuka Holdings Completes Share Repurchase and Announces Treasury Stock Cancellation
Apr 16, 2025

Otsuka Holdings Co., Ltd. has completed a significant share repurchase and announced the cancellation of a portion of its treasury stock. This strategic move, involving the repurchase of over 9 million shares, aims to optimize the company’s capital structure and potentially enhance shareholder value.

Otsuka Holdings Announces Significant Share Repurchase
Apr 1, 2025

Otsuka Holdings Co., Ltd. has announced the repurchase of 7,510,800 shares of its common stock, amounting to approximately 59 billion yen, as part of a resolution made by its Board of Directors. This strategic move, executed through market purchases on the Tokyo Stock Exchange, is aimed at optimizing the company’s capital structure and potentially enhancing shareholder value.

Otsuka Seeks FDA Approval for Innovative IgAN Treatment
Mar 30, 2025

Otsuka Holdings Co., Ltd. has submitted a Biologics License Application to the FDA for sibeprenlimab, a monoclonal antibody designed to treat immunoglobulin A nephropathy (IgAN), a chronic kidney disease. This submission, supported by successful clinical trials, marks a significant step in providing a new treatment option that could potentially alter the course of IgAN, offering patients the convenience of home administration and addressing a critical unmet medical need.

Otsuka Holdings Announces Disposal of Treasury Shares for Director Incentives
Mar 28, 2025

Otsuka Holdings Co., Ltd. has announced a plan to dispose of treasury shares as part of a restricted stock compensation plan aimed at incentivizing directors to achieve medium- to long-term corporate goals. This move is expected to align the interests of directors with those of shareholders and enhance corporate value, with implications for the company’s operational strategy and stakeholder engagement.

Otsuka Holdings Corrects Disclosure on Taiho’s Acquisition of Araris Biotech
Mar 24, 2025

Otsuka Holdings Co., Ltd. announced a correction to its previous disclosure regarding Taiho Pharmaceutical’s acquisition of Araris Biotech, a next-generation ADC drug discovery company. The correction involved changes in the details of major shareholders and shareholding ratios, highlighting the involvement of 4BIO Ventures II L.P. instead of 4BIO Partners LLP. This correction ensures accurate representation of the stakeholders involved in the acquisition, which could influence the strategic positioning of Otsuka Holdings in the pharmaceutical industry.

Otsuka Holdings Announces Change in Major Shareholders
Mar 21, 2025

Otsuka Holdings Co., Ltd. announced a change in its major shareholders following a share repurchase on March 19, 2025. The Nomura Trust and Banking Co., Ltd., specifically the Otsuka Founder’s Shareholding Association Trust Account, remains a significant shareholder with a slight increase in its voting rights ratio, although its ranking among major shareholders remains unchanged. This change is not expected to impact the company’s management or business performance.

Otsuka Holdings Completes Major Share Repurchase
Mar 19, 2025

Otsuka Holdings Co., Ltd. has completed a significant share repurchase of 7,380,000 shares, amounting to approximately 57.95 billion yen, through the ToSTNeT-3 system. This strategic move is part of a broader plan to repurchase up to 12 million shares or 70 billion yen worth of stock by April 30, 2025, as approved by their Board of Directors. This initiative is likely to impact the company’s stock value and enhance shareholder returns.

Otsuka Holdings Announces Share Buyback Plan
Mar 18, 2025

Otsuka Holdings Co., Ltd. announced a board-approved plan to repurchase up to 8,914,900 of its own shares, representing 1.66% of total shares, through the Tokyo Stock Exchange’s off-auction trading system. This strategic move, with a maximum repurchase price of ¥70 billion, aims to optimize capital structure and enhance shareholder value, although actual repurchase may vary based on market conditions.

Otsuka Holdings Announces Strategic Share Repurchase and Cancellation
Mar 18, 2025

Otsuka Holdings Co., Ltd. has announced a strategic move to repurchase and subsequently cancel its own shares, aiming to enhance capital efficiency and return profits to shareholders. This decision, approved by the Board of Directors, involves repurchasing up to 12 million shares, representing 2.23% of the total shares outstanding, with a maximum repurchase price of ¥70 billion. The repurchase will occur between March 19 and April 30, 2025, with the cancellation of these shares scheduled for May 23, 2025. This move is expected to positively impact the company’s financial structure and shareholder value.

Taiho Pharmaceutical to Acquire Araris Biotech for $400 Million
Mar 17, 2025

Otsuka Holdings Co., Ltd. announced that its subsidiary, Taiho Pharmaceutical, will acquire Swiss biotech company Araris Biotech AG for $400 million, with potential additional milestone payments of up to $740 million. This acquisition will enhance Taiho’s capabilities in developing next-generation ADCs, strengthening its oncology portfolio and positioning it as a leader in innovative cancer therapies.

Otsuka Holdings Reports Strong Financial Growth for 2024
Feb 18, 2025

Otsuka Holdings Co., Ltd. reported a significant increase in their nonconsolidated financial results for the year ended December 31, 2024, compared to the previous year. The rise in operating revenue, operating income, ordinary income, and net profit was largely attributed to increased dividends received from subsidiaries, indicating a robust financial performance that enhances the company’s market positioning and profitability.

Otsuka Holdings Reports Strong Financial Growth in FY2024
Feb 14, 2025

Otsuka Holdings Co., Ltd. reported significant financial growth for the fiscal year ended December 31, 2024, with a revenue increase of 15.4% and a substantial rise in profits. The company’s strategic investments and operational efficiencies have resulted in improved financial metrics, enhancing its competitive positioning in the industry. The inclusion of Jnana Therapeutics Inc. in its consolidation scope indicates ongoing strategic expansion, which could have positive implications for stakeholders.

Otsuka Holdings Co. Considers Lowering Investment Units to Attract Individual Investors
Feb 14, 2025

Otsuka Holdings Co. has announced its approach to potentially lower the stock investment unit to create a more investable environment for individual investors. The company plans to consider various factors, including market trends and shareholder composition, before deciding on specific measures such as stock splits.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.