On Tuesday, Lion Corp. (4912:JP) (OTC: LIOPF) received an upgrade in its stock rating by Jefferies, moving from Hold to Buy. The firm also increased the price target for the company's shares to JPY1,750 from the previous JPY1,380.
The upgrade is attributed to anticipated demand for two of Lion's profitable product categories and the company's promising overseas growth prospects.
Analysts at Jefferies believe that competition in the oral care sector is diminishing, which may benefit Lion Corp. Additionally, the hand soap market, which had been struggling, is expected to have reached its lowest point and is now on a path to recovery. These factors are positive indicators for Lion's future performance in these areas.
The report also highlights Lion Corp.'s strategic focus on personal health-related categories as a key driver for stable growth outside of its domestic market.
The company's international business strength is thought to be underestimated, suggesting that there may be more room for growth than is currently recognized by the market.
Lion Corp. is expected to maintain its double-digit percentage growth in earnings before interest and taxes (EBIT). This projection is based on the company's apparent high feasibility in its operations and strategies. The upgrade reflects confidence in Lion's ability to sustain this level of profitability moving forward.
In addition to the overall positive outlook, Lion Corp. has the potential to gain additional market share in the oral care segment, which could further enhance the company's financial performance and market position. Jefferies' new price target of JPY1,750 represents a significant increase from the previous target, indicating a bullish stance on the stock.
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