What the bad jobs report means for markets
On Tuesday, JPMorgan analysts adjusted their outlook on Adastria Co Ltd (2685:JP), slashing the price target from JPY4,000 to JPY3,300 while sustaining an Overweight rating on the company’s shares. The revision comes after considering a range of factors including the fourth-quarter fiscal year 2024 results, fiscal year 2025 sales trends, and the overall business climate.
The firm’s analysts have reduced their earnings estimates for Adastria, anticipating a 9-11% decrease in operating profit forecasts for fiscal years 2025 to 2027. The primary adjustments were made to the parent company’s sales projections. The new price target is based on a price-to-earnings ratio of approximately 13 times the forecasted fiscal year 2026 earnings per share.
According to JPMorgan, Adastria’s operating profit estimates for fiscal years 2025 and 2026 are both 4% below the Bloomberg consensus. The analysts expect that the company’s operating profit for fiscal year 2025 will fall short of the guidance provided. They predict that Adastria’s stock may not see significant upward movement in the near term.
The analysts also suggest that if Adastria revises its guidance downward in the first half of the fiscal year, it could set the stage for the share price to find a floor. This potential adjustment would be based on the anticipation of a strong profit growth in the second half of the year. JPMorgan’s commentary indicates a cautious short-term stance but leaves room for a more optimistic view in the latter half of the fiscal year.
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