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On Friday, Jefferies began coverage on Toho Co Ltd (9602:JP) (OTC: TKCOF), a prominent cinema operator in Japan, issuing a Hold rating and setting a price target of JPY7,600.00. The research firm’s analysts highlighted Toho’s potential transition into an anime powerhouse, supported by a vertically integrated business model and a robust pipeline of content.
The analysts noted that while the cinema market in Japan is mature, it may require some time to rebound to pre-pandemic levels of performance. They also pointed out that Toho’s real estate business is expected to generate stable returns. The current valuation of Toho’s stock was deemed fair by Jefferies, leading to the decision to initiate coverage with a Hold rating.
Toho, known for its cinema operations, is poised to make significant strides in the anime industry. The analysts at Jefferies identified the company’s development strategy that includes leveraging its comprehensive business model, which spans from production to distribution.
Despite the optimism surrounding Toho’s expansion into anime, the analysts expressed caution regarding the broader cinema market’s recovery pace. They suggested that it might be a gradual process for the market to achieve the high revenue marks seen before the COVID-19 pandemic disrupted global industries.
In conclusion, Jefferies’ initiation of coverage on Toho Co Ltd reflects a balanced view of the company’s prospects. The Hold rating and the JPY7,600.00 price target indicate a recognition of Toho’s strengths in content pipeline and real estate, alongside a cautious outlook on the immediate future of the cinema sector’s recovery.
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