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Investing.com - BofA Securities raised its price target on ORIX Corp (8591:JP) (NYSE:IX) to JPY3,880.00 from JPY3,620.00 while maintaining a Neutral rating on the stock. The financial services giant, with a market capitalization of $26.91 billion, has demonstrated strong momentum with a 13.59% return year-to-date. InvestingPro data shows the company maintains a robust financial health score of 2.81, rated as "GOOD."
The price target adjustment comes as ORIX’s return on equity (ROE) approaches 10%, prompting BofA to raise its target price-to-book ratio from 0.95x to 1.0x while maintaining a 10% cost of capital assumption.
BofA also increased its price objective for ORIX’s American Depositary Receipt (ADR) from $24.69 to $26.12, applying the multiple to its end-FY3/26 book value per share estimate of JPY3,880.
The firm projects ORIX will achieve ROE of 10.3% in FY3/26, 10.2% in FY3/27, and 10.7% in FY3/28, showing a steady improvement in the company’s profitability metrics.
BofA has also revised its estimate for ORIX’s annual share buybacks upward from JPY100 billion to JPY150 billion, suggesting increased capital returns to shareholders.
In other recent news, Orix Corporation reported the completion of several share repurchases as part of an ongoing buyback program. In July, the company repurchased 5.4 million common shares for approximately ¥17.98 billion. This followed a June repurchase of 4.5 million shares at a cost of about ¥13.95 billion. Earlier, between May 19 and May 31, Orix repurchased over 3 million shares for ¥8.98 billion. These buybacks are part of a broader initiative authorized by the Board of Directors to repurchase up to 40 million shares or ¥100 billion in total, extending until March 31, 2026.
Additionally, Orix announced management changes effective July 1, with Satoru Matsuzaki taking on expanded responsibilities within the Group Strategy Business Unit. The company is also planning to acquire a majority stake in Hilco Global, an Illinois-based financial services firm, to bolster its asset management capabilities in the U.S. This acquisition is still under negotiation, following a nonbinding Letter of Intent signed in May. These developments reflect Orix’s strategic moves to enhance its market position and operational efficiency.
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