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Otsuka Holdings Co Ltd (OTSKY)
OTHER OTC:OTSKY
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Otsuka Holdings Co
(OTC:OTSKY)
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Select Model
Rating:73Outperform
Price Target:
$30.00
▲(10.74% Upside)
Otsuka Holdings Co's strong financial performance is the most significant factor, showcasing robust growth and efficient operations. The valuation suggests the stock may be undervalued, providing a potential opportunity for investors. Technical analysis indicates a neutral trend with potential for recovery. Overall, the stock presents a solid investment case with some room for improvement in market momentum.
Otsuka Holdings Co (OTSKY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$28.64B
Dividend Yield1.2%
Average Volume (3M)4.89K
Price to Earnings (P/E)10.7
Beta (1Y)0.23
Revenue Growth9.96%
EPS Growth222.96%
CountryUS
Employees35,338
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)0.56
Shares Outstanding1,085,977,800
10 Day Avg. Volume2,307
30 Day Avg. Volume4,892
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)1.69
Price to Sales (P/S)1.99
P/FCF Ratio20.55
Enterprise Value/Market Cap0.88
Enterprise Value/Revenue0.01
Enterprise Value/Gross Profit0.01
Enterprise Value/Ebitda0.05
Forecast
1Y Price Target
$30.00Price Target Upside10.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Otsuka Holdings Co Business Overview & Revenue Model
Company DescriptionOtsuka Holdings Co., Ltd. is a Japanese multinational company engaged in the pharmaceutical and nutraceutical sectors. Founded in 1921 and headquartered in Tokyo, Otsuka operates through its subsidiaries in areas including pharmaceuticals, consumer health products, and medical devices. The company is known for its innovative medicines in areas such as psychiatry, neurology, and oncology, as well as its popular beverage products, including functional drinks and nutritional supplements, which cater to health-conscious consumers.
How the Company Makes MoneyOtsuka Holdings generates revenue primarily through its pharmaceutical division, which offers prescription medications for various health conditions, leading to substantial sales from drug formulations, particularly in psychiatry and neurology. This segment is bolstered by ongoing research and development initiatives, resulting in new drug approvals and market expansions. Additionally, the company's consumer health division contributes significantly to its earnings through the sale of nutraceuticals and functional beverages, supported by brand strength and effective marketing strategies. Otsuka also engages in strategic partnerships and collaborations with other pharmaceutical companies for joint ventures, research efforts, and marketing, enhancing its revenue potential. Overall, the company's diverse portfolio and commitment to innovation help sustain its financial growth.
Otsuka Holdings Co Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q2-2024)
| % Change Since: |
Next Earnings Date:Oct 31, 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 strong financial performance with impressive growth and profitability. The company has a high Gross Profit Margin of 71.7% and a Net Profit Margin of 14.7%. It also shows consistent revenue growth and robust operating performance with strong EBIT and EBITDA margins. The balance sheet is solid with low leverage and a high Equity Ratio, while cash flow metrics indicate strong liquidity and cash generation capabilities.Income Statement
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.85
Very Positive
Balance Sheet
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.78
Positive
Cash Flow
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.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.40T | 2.33T | 2.02T | 1.74T | 1.50T | 1.42T |
| Gross Profit | 1.73T | 1.67T | 1.41T | 1.17T | 1.00T | 983.08B |
| EBITDA | 536.85B | 452.62B | 246.96B | 279.83B | 231.43B | 291.03B |
| Net Income | 408.85B | 343.12B | 121.62B | 133.91B | 125.46B | 148.14B |
Balance Sheet | ||||||
| Total Assets | 3.79T | 3.74T | 3.36T | 3.10T | 2.82T | 2.63T |
| Cash, Cash Equivalents and Short-Term Investments | 436.65B | 458.08B | 529.40B | 489.12B | 430.76B | 401.77B |
| Total Debt | 211.51B | 189.38B | 214.19B | 194.16B | 212.45B | 226.08B |
| Total Liabilities | 1.00T | 961.09B | 924.93B | 840.17B | 775.73B | 744.38B |
| Stockholders Equity | 2.72T | 2.73T | 2.39T | 2.23T | 2.01T | 1.85T |
Cash Flow | ||||||
| Free Cash Flow | 340.80B | 225.28B | 168.56B | 104.06B | 115.71B | 134.96B |
| Operating Cash Flow | 434.32B | 354.64B | 283.23B | 211.85B | 228.86B | 232.84B |
| Investing Cash Flow | -237.53B | -265.79B | -190.54B | -81.58B | -95.29B | -99.86B |
| Financing Cash Flow | -248.59B | -189.37B | -60.26B | -95.47B | -95.84B | -104.93B |
Otsuka Holdings Co Technical Analysis
Positive
27.09
Price Trends
27.30
Negative
25.65
Positive
25.41
Positive
Market Momentum
-0.12
Positive
49.71
Neutral
42.93
Neutral
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 27.09 is above the 20-day moving average (MA) of 27.07, below the 50-day MA of 27.30, and above the 200-day MA of 25.41, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 49.71 is Neutral, neither overbought nor oversold. The STOCH value of 42.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OTSKY.
Otsuka Holdings Co Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $146.23B | 23.44 | 33.26% | 2.56% | 3.69% | 501.26% | |
78 Outperform | $88.22B | 20.15 | 23.04% | 3.75% | 3.46% | -13.29% | |
77 Outperform | $20.86B | 13.68 | 9.13% | ― | 3.48% | 31.44% | |
76 Outperform | $122.73B | 12.44 | 8.39% | 4.37% | -9.32% | 120.62% | |
73 Outperform | $28.64B | 10.67 | 15.51% | 1.20% | 9.96% | 222.96% | |
66 Neutral | $88.32B | 17.51 | 29.31% | 5.68% | 2.57% | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
OTSKY
Otsuka Holdings Co
27.09
-3.05
-10.12%
BIIB
Biogen
143.00
-41.65
-22.56%
BMY
Bristol-Myers Squibb
43.63
-6.02
-12.12%
GILD
Gilead Sciences
122.81
39.02
46.57%
GSK
GlaxoSmithKline
43.91
7.39
20.24%
SNY
Sanofi
50.62
-1.38
-2.65%
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.