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JPMorgan raised its rating on Oji Holdings Corp (3861:JP) (OTC:OJIPY) from Neutral to Overweight on Wednesday, citing expectations for rapid operating profit recovery over the next two years.
The financial services firm also increased its price target for the Japanese paper manufacturer to JPY880.00 from JPY690.00, representing significant upside potential for the stock.
JPMorgan forecasts aggregate operating profit at the paper manufacturers it regularly covers to reach ¥174.5 billion in FY2025, ¥215.2 billion in FY2026, and ¥219.0 billion in FY2027, according to its research note.
The firm expects Oji’s profits to switch direction and rise 30% year-over-year in FY2025, with further growth of 23% in FY2026, driven primarily by product price hikes beginning in FY2025.
Beyond the period of rapid profit recovery, JPMorgan anticipates Oji’s return on equity to rise to the highest level among Japan’s paper and packaging companies, attributing this improvement to the company’s financial strategy.
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