Analyst Natsumu Tsujino of Bank of America Securities maintained a Hold rating on ORIX (ORXCF – Research Report), retaining the price target of Yen3,730.00.
Natsumu Tsujino has given his Hold rating due to a combination of factors surrounding ORIX’s current strategic direction and financial targets. The management’s medium-term plan aims for a return on equity (ROE) of 11%, with aspirations to reach 12% in five years, indicating a cautious yet optimistic growth outlook. While there is a stronger commitment to achieving double-digit earnings per share (EPS) growth, this ambition is tempered by the company’s decision not to borrow for share buybacks, maintaining a conservative financial approach.
Additionally, the company’s strategic focus on business solutions and alternative investments presents both opportunities and challenges. ORIX is leveraging its corporate finance customer base to enhance its business problem-solving services, yet profit growth in this segment remains stagnant. In the realm of alternative investments, while ORIX has a substantial asset base, the distribution of these assets poses a challenge. The company’s plans to expand its assets under management and invest in growth sectors and technology acquisitions are promising, but their impact remains to be seen until the medium-term plan is fully detailed. These factors collectively contribute to the Hold rating, reflecting a balanced view of potential growth and existing uncertainties.