TOKYO -- Olympus' stock hit its highest price since August 2008 on Monday, receiving a shot in the arm from swelling expectations for its medical equipment business.
Olympus touched a high of 3,670 yen ($35.60) on the Tokyo Stock Exchange, up 6.4% over Friday's close. Turnover soared to a two-month high as well. Its shares closed up for a fifth session in a row, ending at 3,620 yen.
The jump was caused by predictions that the optics company's consolidated April-June performance will improve due to the recovery of its medical equipment business in China and North America. The slowdown in China's economy last quarter caused Olympus' yuan-denominated revenue to decrease there, but a company executive said it saw double-digit growth in April and May. Olympus holds about 70% of the global market for endoscopes, and its medical business has been a main profit generator.
A report Goldman Sachs released Monday also boosted confidence in the Japanese company's stock. Olympus has not disclosed a forecast for its consolidated operating profit for this quarter, but Goldman Sachs expects it to double on the year to 16.5 billion yen. Analyst Toshiya Hari said that "even domestically, the dip from the consumption tax hike is less than expected."
The company also shows promise for medium-term growth. It hopes to raise its operating profit to 143 billion yen in fiscal 2016, up 60% from the projected figure for the year ending in March. Many analysts, however, call the forecast too conservative, saying the company has more growth potential.