Otsuka Holdings Co (OTSKY) AI Stock Analysis

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Otsuka Holdings Co

(OTC:OTSKY)

Rating:80Outperform

Price Target:

$27.00

▲(12.97%Upside)

Otsuka Holdings Co's strong financial performance is the most significant factor, demonstrating impressive growth and stability. The valuation is also favorable, suggesting the stock may be undervalued. Technical indicators present mixed signals, with caution advised due to potential overbought conditions. The absence of earnings call and corporate events data had no impact on the scoring.

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

Market Cap

$24.75B

Dividend Yield1.02%

Average Volume (3M)2.72K

Price to Earnings (P/E)11.0

Beta (1Y)0.29

Revenue Growth8.66%

EPS Growth142.58%

CountryUS

Employees35,338

SectorHealthcare

Sector Strength37

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)0.56

Shares Outstanding1,085,977,800

10 Day Avg. Volume4,273

30 Day Avg. Volume2,723

Financial Highlights & Ratios

PEG Ratio4.02

Price to Book (P/B)1.34

Price to Sales (P/S)0.00

P/FCF Ratio12.15

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$28.00

Price Target Upside17.15% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

Otsuka Holdings Co Business Overview & Revenue Model

Company DescriptionOtsuka Holdings Co., Ltd., headquartered in Tokyo, Japan, is a diversified company primarily engaged in the pharmaceutical and nutraceutical sectors. The company operates through its subsidiaries, offering a wide range of products including pharmaceuticals, clinical nutrition, and consumer products. Otsuka is known for its innovative pharmaceuticals used in the treatment of central nervous system disorders, oncology, and infectious diseases, as well as its leading nutritional brands such as POCARI SWEAT, a popular sports drink, and SOYJOY, a soy-based nutritional bar.

How the Company Makes MoneyOtsuka Holdings generates revenue through multiple channels, primarily from its pharmaceutical and nutraceutical divisions. The pharmaceutical segment, which is the most significant revenue driver, earns money from the development, manufacture, and sale of prescription drugs and medical devices. This includes revenue from proprietary products, licensing agreements, and collaborative partnerships with global pharmaceutical companies. The nutraceutical division contributes through sales of consumer health products such as beverages and food supplements. Additionally, the company strategically invests in research and development to innovate and expand its product portfolio, further boosting its revenue. Otsuka also engages in partnerships and joint ventures, enhancing its market reach and distribution capabilities.

Otsuka Holdings Co Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q2-2024)

% Change Since: 0.34%|

Next Earnings Date:Jul 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 excellent growth and profitability in the income statement, a robust balance sheet with low leverage, and strong cash flow metrics, indicating a financially sound and stable entity.

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.33T	2.02T	1.74T	1.50T	1.42T
Gross Profit	1.67T	1.41T	1.17T	1.00T	983.08B
EBITDA	452.62B	246.96B	279.83B	231.43B	291.03B
Net Income	343.12B	121.62B	133.91B	125.46B	148.14B
Balance Sheet
Total Assets	3.74T	3.36T	3.10T	2.82T	2.63T
Cash, Cash Equivalents and Short-Term Investments	458.08B	529.40B	489.12B	430.76B	401.77B
Total Debt	189.38B	214.19B	194.16B	212.45B	226.08B
Total Liabilities	961.09B	924.93B	840.17B	775.73B	744.38B
Stockholders Equity	2.73T	2.39T	2.23T	2.01T	1.85T
Cash Flow
Free Cash Flow	225.28B	168.56B	104.06B	115.71B	134.96B
Operating Cash Flow	354.64B	283.23B	211.85B	228.86B	232.84B
Investing Cash Flow	-265.79B	-190.54B	-81.58B	-95.29B	-99.86B
Financing Cash Flow	-189.37B	-60.26B	-95.47B	-95.84B	-104.93B

Otsuka Holdings Co Technical Analysis

Technical Analysis Sentiment

Positive

Last Price23.90

Price Trends

50DMA

23.66

Positive

100DMA

24.40

Negative

200DMA

26.08

Negative

Market Momentum

MACD

-0.23

Negative

RSI

56.85

Neutral

STOCH

100.06

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 23.9 is above the 20-day moving average (MA) of 23.05, above the 50-day MA of 23.66, and below the 200-day MA of 26.08, indicating a neutral trend. The MACD of -0.23 indicates Negative momentum. The RSI at 56.85 is Neutral, neither overbought nor oversold. The STOCH value of 100.06 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 (46)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OTSKY	80 Outperform	$24.75B	11.02	13.46%	1.02%	8.66%	142.58%
SNY	75 Outperform	$122.08B	20.86	7.34%	0.09%	-4.57%	2.96%
BMY	72 Outperform	$99.60B	18.37	31.99%	5.08%	4.62%	―
GRFS	72 Outperform	$8.64B	32.83	3.34%	―	9.67%	1.92%
BIIB	71 Outperform	$19.27B	12.99	9.19%	―	1.25%	26.10%
GSK	68 Neutral	$75.41B	19.61	22.26%	0.11%	4.17%	-29.96%
Sector *	46 Neutral	C$201.68M	-3.23	-23.14%	1.87%	20.75%	-0.36%

* Healthcare Sector Average

Performance Comparison

OTSKY

Otsuka Holdings Co

23.90

-0.96

-3.86%

BIIB

Biogen

131.52

-82.91

-38.67%

BMY

Bristol-Myers Squibb

48.43

1.65

3.53%

GSK

GlaxoSmithKline

37.97

-0.39

-1.02%

GRFS

Grifols SA

10.10

2.39

31.00%

SNY

Sanofi

50.37

-0.11

-0.22%

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.Date of analysis: Jul 26, 2025