ORIX Corporation: Spotlight On Guidance Miss And Ambitious Goal (Rating Downgrade)

2025-05-13 10:21:22 ET

Summary

• My rating for ORIX Corporation is lowered from Buy to Hold, considering its short-term prospects and mid-term targets.
• ORIX's FY25 earnings and FY26 bottom-line guidance missed their respective consensus forecasts by -7% and -9%, respectively.
• But there's potential for a positive valuation re-rating in time to come, if the company's ROE improves from 8.8% last year to the targeted 11% in three years' time.

I have turned Neutral on ORIX Corporation ( IX ) ( OTCPK:ORXCF ) (8591.T).

The previous September 26, 2024 update outlined my bullish opinion of ORIX, taking into account its cash distributions and rate tailwinds....

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