Bullish indicating open at $55-$60, IPO prices at $37
On Thursday, JPMorgan analysts upgraded Odakyu Electric Railway Co Ltd (9007:JP) stock rating from Neutral to Overweight. The analysts also raised the price target to ¥1,900 from ¥1,600. The change reflects confidence in the company’s strategic moves and financial stability.
The analysts highlighted that Odakyu Electric has secured the necessary funds for the Shinjuku redevelopment project by selling assets. This step minimizes the risk of potential cost increases or delays in construction, as construction contracts have already been signed.
Odakyu’s strategy includes presenting a shareholder return policy that is considered the best in the private railway industry. The company aims for a return on equity (ROE) target of 10% or higher by fiscal year 2030, surpassing its peers. Tobu Railway aims for an ROE of 8% or higher by the mid-2030s, Keio targets 9% or higher by FY2030, and Hankyu Hanshin aims for 8% by FY2030.
The analysts’ decision to upgrade the stock rating and increase the price target underscores confidence in Odakyu’s financial strategy and growth prospects. The company’s ability to fund significant projects while maintaining strong shareholder returns positions it favorably in the industry.
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