Otsuka Holdings Co (OTSKY) AI Stock Analysis

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Otsuka Holdings Co

(OTC:OTSKY)

Rating:81Outperform

Price Target:

$28.00

▲(11.33%Upside)

Otsuka Holdings Co receives a strong overall stock score of 81, primarily driven by its robust financial performance featuring strong growth, profitability, and stability. The company's valuation is attractive, and technical indicators suggest stability, further supporting the positive outlook.

Otsuka Holdings Co (OTSKY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$26.55B

Dividend Yield0.96%

Average Volume (3M)1.64K

Price to Earnings (P/E)11.7

Beta (1Y)0.27

Revenue Growth8.66%

EPS Growth142.58%

CountryUS

Employees35,338

SectorHealthcare

Sector Strength58

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)0.56

Shares Outstanding1,085,977,800

10 Day Avg. Volume0

30 Day Avg. Volume1,636

Financial Highlights & Ratios

PEG Ratio1.29

Price to Book (P/B)0.52

Price to Sales (P/S)0.00

P/FCF Ratio11.13

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusHold

Number of Analyst Covering1

Otsuka Holdings Co Business Overview & Revenue Model

Company DescriptionOtsuka Holdings Co., Ltd. is a Japanese multinational corporation primarily engaged in pharmaceuticals, nutraceuticals, consumer products, and other diversified businesses. The company operates through various subsidiaries, with a strong focus on its Pharmaceutical and Nutraceutical segments. Otsuka is renowned for its innovative products such as Abilify, a prescription medication for treating mental health disorders, and popular consumer brands like Pocari Sweat and Nature Made supplements.

How the Company Makes MoneyOtsuka Holdings Co. generates revenue through its diversified business segments, with a primary focus on pharmaceuticals and nutraceuticals. The Pharmaceutical segment contributes significantly to its earnings, driven by the development, manufacturing, and sale of prescription medications, including its flagship product, Abilify. The Nutraceutical segment provides a steady revenue stream through the sale of functional foods and beverages, dietary supplements, and skincare products, with well-known brands like Pocari Sweat and Nature Made enhancing its market presence. Additionally, strategic partnerships and collaborations in research and development, as well as investments in innovation, play a crucial role in sustaining and expanding its revenue base. The company's global reach and diverse product offerings enable it to tap into various markets, further solidifying its financial performance.

Otsuka Holdings Co Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q2-2024)

% Change Since: 5.58%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

The earnings call presented a strong overall performance in both pharmaceutical and nutraceutical segments with significant revenue and profit growth, and positive strategic expansions such as the acquisition for drug discovery. However, there were challenges such as impairment losses and increased SG&A expenses.

Q2-2024 Updates

Positive Updates

Significant Revenue and Profit Growth

Revenue increased by 17.0% to JPY 1,108.9 billion, and business profit grew by 37.8% to JPY 213.6 billion year-on-year, highlighting strong performance in pharmaceutical and nutraceutical segments.

Nutraceutical Business Expansion

The Nutraceutical business achieved over 20% growth, with revenue increasing in all three categories, notably For Women's Health at 56.9% and For Healthier Life at 25.5%.

Pharmaceutical Business Growth

Revenue in the pharmaceutical business increased by 17.9% year-on-year to JPY 766.7 billion, with significant contributions from products like REXULTI and LONSURF.

Upward Revision of Financial Forecast

The full-year revenue forecast was revised up by JPY 175 billion to JPY 2,315 billion, and business profit was revised up by JPY 60 billion to JPY 390 billion.

Acquisition for Drug Discovery

Announcement of the acquisition of a company in Boston for drug discovery technology, indicating strategic expansion.

Negative Updates

Impairment Loss Impact

Operating profit was impacted by an impairment loss on AVP-786, which led to strategic discontinuation of its development.

Decrease in Milestone Revenue

Upfront milestone and royalty revenue decreased to JPY 41.8 billion due to lower sales milestone income compared to the previous year.

Increase in SG&A Expenses

SG&A expenses increased due to higher promotion expenses, impacting overall cost management.

Company Guidance

During the Q2 2024 earnings call for 4578.T, significant financial growth was highlighted, with revenue increasing by 17.0% to JPY 1,108.9 billion and business profit rising by 37.8% to JPY 213.6 billion year-on-year, driven by strong performance in pharmaceutical and nutraceutical segments. Despite an impairment loss on AVP-786 affecting operating profit, net profit climbed by 5.1% due to finance income. The pharmaceutical business saw revenue increase by 17.9% to JPY 766.7 billion, bolstered by products like ABILIFY MAINTENA and JYNARQUE, while LONSURF achieved significant gains through colorectal cancer treatment guidelines endorsements. Nutraceuticals experienced over 20% growth, with revenue reaching JPY 271.8 billion, fueled by a 56.9% rise in the For Women's Health category. The company revised its full-year forecast, raising revenue expectations by JPY 175 billion to JPY 2,315 billion and business profit projections by JPY 60 billion to JPY 390 billion, aiming to maintain momentum through strategic investments and addressing social issues.

Otsuka Holdings Co Financial Statement Overview

Summary

Otsuka Holdings Co demonstrates a robust financial profile with strong income statement growth, profitability, and stability. The company has impressive gross and net profit margins, low leverage, and strong cash flow generation, positioning it well within the industry.

Income Statement

Very Positive

Otsuka Holdings Co has demonstrated impressive growth and profitability in its income statement. The company achieved a Gross Profit Margin of 71.7% in 2024, reflecting efficient cost management. The Net Profit Margin increased to 14.7%, indicating improved profitability. Revenue has grown consistently over recent years, with the latest year showing a significant increase of 15.4%. EBIT and EBITDA margins are also strong at 13.9% and 19.4%, respectively, showcasing robust operating performance.

Balance Sheet

Very Positive

The balance sheet of Otsuka Holdings Co reflects a strong financial position, characterized by a low Debt-to-Equity Ratio of 0.07, indicating low leverage and financial risk. The company has a solid Return on Equity (ROE) of 12.6%, demonstrating effective use of equity capital to generate profits. The Equity Ratio stands at 73.1%, highlighting a stable capital structure with substantial equity financing.

Cash Flow

Very Positive

Otsuka Holdings Co exhibits healthy cash flow metrics with a Free Cash Flow Growth Rate of 33.6%, signifying strong liquidity and cash generation capabilities. The Operating Cash Flow to Net Income Ratio is 1.03, indicating efficient cash conversion from earnings. Additionally, the Free Cash Flow to Net Income Ratio is 0.66, reflecting solid free cash flow relative to earnings.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.18T	2.33T	2.02T	1.74T	1.50T	1.42T
	Gross Profit
1.54T	1.67T	1.41T	1.17T	1.00T	983.08B
	EBIT
317.84B	323.56B	139.61B	220.54B	154.50B	198.58B
	EBITDA
259.41B	452.62B	246.96B	279.83B	231.43B	291.03B
	Net Income Common Stockholders
126.82B	343.12B	121.62B	133.91B	125.46B	148.14B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
591.05B	458.08B	529.40B	489.12B	430.76B	401.77B
	Total Assets
3.66T	3.74T	3.36T	3.10T	2.82T	2.63T
	Total Debt
247.97B	189.38B	214.19B	194.16B	212.45B	226.08B
	Net Debt
-237.93B	-236.79B	-299.15B	-277.47B	-198.23B	-130.77B
	Total Liabilities
993.86B	961.09B	924.93B	840.17B	775.73B	744.38B
	Stockholders Equity
2.62T	2.73T	2.39T	2.23T	2.01T	1.85T
Cash Flow		Free Cash Flow
166.55B	225.28B	168.56B	104.06B	115.71B	134.96B
	Operating Cash Flow
302.74B	354.64B	283.23B	211.85B	228.86B	232.84B
	Investing Cash Flow
-295.42B	-265.79B	-190.54B	-81.58B	-95.29B	-99.86B
	Financing Cash Flow
-39.56B	-189.37B	-60.26B	-95.47B	-95.84B	-104.93B

Otsuka Holdings Co Technical Analysis

Technical Analysis Sentiment

Positive

Last Price25.15

Price Trends

50DMA

24.23

Positive

100DMA

24.95

Positive

200DMA

26.80

Negative

Market Momentum

MACD

0.29

Negative

RSI

55.90

Neutral

STOCH

90.31

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OTSKY, the sentiment is Positive. The current price of 25.15 is above the 20-day moving average (MA) of 24.06, above the 50-day MA of 24.23, and below the 200-day MA of 26.80, indicating a neutral trend. The MACD of 0.29 indicates Negative momentum. The RSI at 55.90 is Neutral, neither overbought nor oversold. The STOCH value of 90.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OTSKY.

Otsuka Holdings Co Peers Comparison

Overall Rating

UnderperformOutperform

Sector (54)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OTSKY	81 Outperform	$26.55B	11.74	13.46%	0.96%	8.66%	142.58%
GSK	70 Neutral	$82.95B	20.96	22.26%	4.20%	4.17%	-29.96%
BIIB	69 Neutral	$19.14B	12.90	9.19%	―	1.25%	26.10%
SNY	67 Neutral	$122.32B	20.67	7.34%	4.45%	-4.57%	2.96%
GRFS	65 Neutral	$7.25B	28.84	3.34%	―	9.67%	1.92%
BMY	63 Neutral	$101.25B	18.68	31.99%	4.98%	4.62%	―
Sector *	54 Neutral	$5.37B	3.26	-45.10%	3.30%	16.81%	0.02%

* Healthcare Sector Average

Performance Comparison

OTSKY

Otsuka Holdings Co

25.15

5.33

26.89%

BIIB

Biogen

130.65

-95.81

-42.31%

BMY

Bristol-Myers Squibb

49.75

10.70

27.40%

GSK

GlaxoSmithKline

40.86

1.88

4.82%

GRFS

Grifols SA

8.87

1.77

24.93%

SNY

Sanofi

49.67

3.84

8.38%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.