Otsuka (4768) AI Stock Analysis

• Market Cap: ¥1.20T
• Dividend Yield: 3.65%
• Average Volume (3M): 936.91K
• Price to Earnings (P/E): 18.6
• Beta (1Y): 0.46
• Revenue Growth: 21.85%
• EPS Growth: 24.41%
• Country: JP
• Employees: 9,680
• Sector: Technology
• Sector Strength: 88
• Industry: Technology Distributors
• EPS (TTM): 46.87
• Shares Outstanding: 380,004,240
• 10 Day Avg. Volume: 844,640
• 30 Day Avg. Volume: 936,913
• PEG Ratio: 0.94
• Price to Book (P/B): 3.11
• Price to Sales (P/S): 0.93
• P/FCF Ratio: 13.95
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥3,060.00
• Price Target Upside: -0.16% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2
• EPS Forecast (FY): 162.95
• Revenue Forecast (FY): ¥1.28T

• Rating: 74 Outperform
• Price Target: ¥3,518.00 ▲(14.78% Upside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

The score is primarily supported by strong financial performance—especially a very conservative balance sheet, improving shareholder returns, and accelerating 2025 revenue growth—partly offset by weaker near-term technical momentum (below key short-term moving averages with negative MACD). Valuation is reasonable with a moderate dividend yield, providing additional support but not a major catalyst.

Positive Factors

Conservative balance sheet

Extremely low leverage and a growing equity base materially reduce financial risk and preserve strategic optionality. Over a multi-month horizon this supports stable funding for operations, capacity to pursue M&A or investment, and resilience through downturns while backing improving ROE.

Accelerating revenue growth

A clear step-up in revenue in 2025 signals durable demand expansion or market-share gains. Sustained top-line momentum expands scale, enhances operating leverage potential, and creates a larger base to fund R&D, capex, and shareholder returns over the coming months.

Strong free cash flow conversion

Marked improvement in FCF and close alignment with earnings indicate high earnings quality and reliable internal funding. Durable high cash conversion supports dividends, buybacks or selective reinvestment without depending on external financing over the medium term.

Negative Factors

Working-capital volatility

Volatile operating cash conversion driven by working-capital swings makes short-to-medium term liquidity and forecasting less predictable. This can force episodic financing or constrain timing of investments and shareholder actions despite strong headline FCF.

Gross margin compression

A multi-year erosion in gross margin points to cost pressure or pricing limits that can blunt operating leverage. If sustained, lower gross margins reduce the upside from revenue growth and force tighter cost control to preserve net margin and ROE improvements.

Under‑utilized balance‑sheet capacity

Very conservative capital structure lowers financial risk but can imply missed opportunities to enhance returns via targeted investment or productive leverage. Over months, this may constrain faster ROE expansion or slower strategic scale-up versus peers using balance sheet more actively.

Otsuka Business Overview & Revenue Model

Company Description

Otsuka Corporation provides system integration, support, and other services in Japan. The System Integration Business segment offers system services, including consulting, system design and development, transport and installation work, and network construction. It also provides management systems and collaborative software, such as ERP packages and groupware to cover a range of specialized fields, including CAD and web technologies; and software, hardware, intranet, and security products for the construction and expansion of computer networks. In addition, this segment sells computers, copiers, and communications equipment and software; and develops consigned software. The Service and Support Business segment offers supplies, hardware and software maintenance, telephone support, and outsourcing services; emergency computer rescue services for corporate and individual clients; and network support and services for the planning, design, construction, and operation of corporate information systems, as well as out-sources system engineers. It also provides educational support services. The company was founded in 1961 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Otsuka generates revenue primarily through the sale of its pharmaceutical products, which include branded medications and generics. The company has a diverse portfolio featuring treatments for psychiatric disorders, such as Abilify, and other conditions like kidney diseases and cancer. Additionally, the nutraceutical segment contributes to revenue through the sale of health-focused products, including vitamins and functional foods. Key revenue streams include direct sales to healthcare providers, hospitals, and retail outlets, as well as licensing agreements and collaborations with other pharmaceutical firms, which enhance its product offerings and market reach. Partnerships with research institutions and involvement in clinical trials further bolster Otsuka's innovation pipeline, leading to potential new revenue opportunities.

Otsuka Financial Statement Overview

Summary

Strong overall fundamentals driven by steady revenue growth with a notable step-up in 2025 and consistently stable profitability. Balance sheet strength is exceptional with extremely low leverage and improving ROE, while cash flow is solid but somewhat less predictable due to working-capital-driven variability in operating cash conversion.

Income Statement

Revenue has expanded steadily from 2020 to 2025 with a clear step-up in the latest year (2025 revenue up ~19% vs. 2024). Profitability is consistent: net margin has held around ~4.6%–4.9% and operating profitability is stable, indicating good cost control despite a slight decline in gross margin over time (from ~21% in 2022–2023 to ~19% in 2025). Overall, the trajectory is positive, with the main watch-out being modest margin compression at the gross level.

Balance Sheet

The balance sheet is very conservative with extremely low leverage (debt-to-equity ~0.02 across the period) alongside a growing equity base and asset base. Returns to shareholders are strong and improving (return on equity rising to ~16% in 2025), suggesting healthy profitability without relying on debt. The primary limitation is not financial risk but potential capital efficiency—such low leverage can be a strength, but it may also indicate the company is under-utilizing balance-sheet capacity.

Cash Flow

Cash generation is solid and has improved meaningfully in 2025: free cash flow rose sharply (about +60% year over year) and is closely aligned with earnings (free cash flow running at ~76%–95% of net income historically, ~95% in 2025). However, operating cash flow relative to sales is uneven year to year (notably weaker in 2024 and 2025 versus 2023), which suggests working-capital volatility and makes cash conversion less predictable despite strong headline free cash flow.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.32T	1.11T	977.37B	861.02B	851.89B
Gross Profit	252.18B	224.47B	203.98B	184.17B	176.89B
EBITDA	99.86B	82.65B	72.86B	64.84B	66.22B
Net Income	64.30B	53.48B	47.45B	40.02B	39.93B
Balance Sheet
Total Assets	729.20B	673.90B	561.80B	523.02B	486.25B
Cash, Cash Equivalents and Short-Term Investments	252.06B	228.14B	228.69B	202.29B	204.70B
Total Debt	7.18B	6.86B	7.30B	8.44B	8.85B
Total Liabilities	329.61B	298.66B	214.85B	200.29B	184.48B
Stockholders Equity	394.32B	370.80B	343.11B	319.39B	298.74B
Cash Flow
Free Cash Flow	87.85B	34.49B	61.30B	22.12B	46.99B
Operating Cash Flow	92.22B	37.71B	71.65B	29.20B	57.87B
Investing Cash Flow	-20.48B	-11.95B	-21.47B	-8.36B	-9.16B
Financing Cash Flow	-47.61B	-25.89B	-23.84B	-23.31B	-21.96B

Otsuka Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3065.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4768, the sentiment is Positive. The current price of 3065 is above the 20-day moving average (MA) of 3051.48, below the 50-day MA of 3144.99, and above the 200-day MA of 3020.54, indicating a bullish trend. The MACD of -20.34 indicates Negative momentum. The RSI at 56.38 is Neutral, neither overbought nor oversold. The STOCH value of 71.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4768.

Otsuka Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8154	81 Outperform	¥218.11B	7.63	14.97%	2.94%	9.67%	45.58%
8093	76 Outperform	¥26.24B	13.58	―	3.83%	41.87%	167.99%
8137	74 Outperform	¥55.01B	19.94	―	4.12%	-4.88%	-26.05%
4768	74 Outperform	¥1.20T	18.57	17.07%	3.65%	21.85%	24.41%
7537	65 Neutral	¥33.32B	11.35	―	5.16%	1.71%	-29.37%
8141	64 Neutral	¥31.96B	101.97	1.55%	1.34%	-34.13%	-31.24%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Otsuka Corporate Events

Otsuka Posts Double-Digit Profit Growth in 2025, Signals Steady Earnings and Higher Dividends for 2026

Otsuka Corporation reported strong results for the fiscal year ended December 31, 2025, with consolidated net sales rising 19.4% year-on-year to ¥1.323 trillion and operating profit up 21.0% to ¥89.9 billion. Profit attributable to owners of the parent climbed 20.2% to ¥64.3 billion, while return on equity improved to 16.8%, supported by robust operating cash flow of ¥92.2 billion and an increase in cash and cash equivalents to ¥253.6 billion. Net assets grew to ¥399.6 billion, though the equity ratio eased slightly to 54.1%, and the company raised its annual dividend to ¥90 per share for 2025, including the introduction of an interim dividend. For 2026, Otsuka forecasts broadly flat performance, guiding for full-year net sales of ¥1.311 trillion and operating profit of ¥90.0 billion, implying a modest decline in profit attributable to owners of the parent and a dividend increase to a projected ¥95 per share, signaling management’s confidence in earnings resilience despite expectations of slower top-line growth.

The most recent analyst rating on (JP:4768) stock is a Hold with a Yen3500.00 price target. To see the full list of analyst forecasts on Otsuka stock, see the JP:4768 Stock Forecast page.