On Friday, UBS upgraded Toyo Suisan Kaisha Ltd. (2875:JP) (OTC: TSUKF) stock from Neutral to Buy, adjusting the price target to JPY11,700 from JPY10,300. The move reflects a more positive outlook on the company's potential for business transformation and growth in the North American market.
UBS's commentary highlighted a shift in perspective regarding Toyo Suisan's transformation and market competition. Initially, there was concern that the company's transformation was not advancing and that market competition in North America could intensify. However, the analyst now believes that management is likely to push forward with business transformation and maintain a focus on earnings, reducing the risk of excessive competition.
The revised analysis includes fine-tuning of the fiscal year March 2025 earnings per share (EPS) forecast and an increase of 8% and 11% for the fiscal years March 2026 and March 2027, respectively. This adjustment is accompanied by a rise in the price-earnings ratio (PER) for the company.
The upcoming announcement of Toyo Suisan's new medium-term plan (MTP) in March 2025 is seen as a potential catalyst for the stock. UBS suggests that if the plan provides clear specifics on the company's outlook, it could lead to an opportunity for share price appreciation.
Investors and market watchers are encouraged to look out for the MTP announcement as it may provide further insights into Toyo Suisan's strategic direction and impact on its financial performance.
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