ASICS Corporation Receives Overweight Rating and Price Target of JPY6,400.00 from Morgan Stanley
Leading financial firm, Morgan Stanley, has reiterated its Overweight rating on ASICS Corporation, offering a bullish price target of JPY6,400.00. The firm’s analysts stated confidently that the share price of the sportswear company is expected to rise in relation to the country index over the next 60 days. This positive outlook is driven by an upcoming earnings release.
ASICS Corporation recently faced a wave of pessimism leading up to its full year December 2024 guidance announcement. This resulted in a correction in the company’s shares. The guidance, which predicted an operating profit of JPY58 billion, fell slightly below the Factset consensus of around JPY61 billion. However, Morgan Stanley believes that this guidance aligns with the majority market view once currency fluctuations are taken into account.
Despite these challenges, ASICS Corporation has shown a strong start to the year in terms of its top-line results for January. This positive performance is particularly noteworthy considering the difficult year-over-year comparisons. Furthermore, the company has announced a share buyback program valued at up to JPY15 billion, indicating confidence in its future prospects. Morgan Stanley estimates a 60% to 70% probability that ASICS will achieve the forecasted scenario, reinforcing their positive outlook.
InvestingPro highlights that ASICS is currently trading at a low price-to-earnings (P/E) ratio compared to its near-term earnings growth. The adjusted P/E ratio for the last twelve months, as of Q4 2023, stands at 23.22, suggesting that the stock might be undervalued when considering its growth potential. Additionally, ASICS has shown significant revenue growth of 17.72% in the last twelve months, also indicating strong financial performance. The company’s impressive gross profit margin of 52.04% further demonstrates its ability to maintain profitability.
ASICS Corporation has established itself as a prominent player in the Textiles, Apparel & Luxury Goods industry. The company’s commitment to rewarding shareholders is evident through its 21 consecutive years of dividend payments, emphasizing its financial stability. Moreover, ASICS has delivered a remarkable one-year price total return of 31.35%, highlighting its potential to outperform. These factors align with Morgan Stanley’s positive view of the company’s prospects.
Overall, ASICS Corporation’s optimistic outlook, backed by Morgan Stanley’s Overweight rating and price target, reflects the company’s resilience and potential for future success in the sportswear market.
Analyst comment
Positive news. The market is expected to react positively to ASICS Corporation’s optimistic outlook and price target of JPY6,400.00. Analysts anticipate the share price to rise in relation to the country index in the next 60 days, driven by an upcoming earnings release. The company’s strong start to the year, share buyback program, undervalued stock, and impressive financial performance further support the positive outlook.
