On Monday, Morgan Stanley reiterated its Overweight rating on ASICS Corporation (7936:JP) (OTC: ASCCY), with a price target set at JPY6,400.00.
"We believe the share price will rise relative to the country index over the next 60 days. This is because of an earnings release," said the analysts in a note.
ASICS Corporation had previously faced a wave of pessimism leading up to its full year December 2024 guidance announcement, which had seen the shares undergo some correction. The guidance for operating profit (OP) of JPY58 billion was below the Factset consensus of around JPY61 billion. However, Morgan Stanley believes that the guidance is likely aligned with the majority market view once currency fluctuations are factored out.
The company's top-line results for January showed a strong beginning to the year, even when compared to the challenging year-over-year comparisons. This performance is viewed positively in light of the company's historical financial results.
Adding to the positive outlook, ASICS has announced a share buyback program valued at up to JPY15 billion. This move is consistent with the company's capital strategy and is seen as favorable news by Morgan Stanley. The financial institution estimates a 60% to 70% probability—or "likely" chance—that ASICS will achieve the forecasted scenario.
InvestingPro Insights
In light of Morgan Stanley's optimistic stance on ASICS Corporation, the InvestingPro data and tips provide additional insights that may interest investors. According to InvestingPro, ASICS is trading at a low P/E ratio relative to near-term earnings growth, with an adjusted P/E ratio for the last twelve months as of Q4 2023 standing at 23.22. This suggests that the stock may be undervalued when considering its growth potential.
InvestingPro data also highlights a robust revenue growth of 17.72% for the last twelve months as of Q4 2023, indicating a strong financial performance. Furthermore, the company's gross profit margin is impressive at 52.04%, showcasing its ability to maintain profitability.
An InvestingPro Tip worth noting is that ASICS has been a prominent player in the Textiles, Apparel & Luxury Goods industry and has maintained dividend payments for 21 consecutive years. This consistency in rewarding shareholders underscores the company's financial stability and commitment to returning value.
Additionally, ASICS has demonstrated a strong return over the last year, with a 31.35% one-year price total return as of the most recent data. This aligns with Morgan Stanley's view of the company's potential to outperform.
For investors looking for more in-depth analysis, there are seven additional InvestingPro Tips available at https://www.investing.com/pro/ASCCY. These tips delve further into the company's financial health, industry position, and long-term performance. To access these insights and more, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.