Oriental Land (4661): After period of trial and error, various concerns gradually resolving

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

20 August 2026

Oriental Land (4661)

After period of trial and error, various concerns

gradually resolving

Overweight

4661.T, 4661 JP

Price (20 Aug 26):¥2,975

▲Price Target (Dec-27):¥5,000

Prior (Dec-26):¥4,500

We raise our operating profit estimates from FY2026 and our price target (now

through December 2027) from ¥4,500 to ¥5,000. We have been expecting (1) a

higher weighted average ticket price due to diversification of the ticketing strategy,

and (2) higher park attendance due to Oriental Land (OLC) strengthening events.

This is still fundamentally our view, but it has taken more time than we expected

to confirm these changes due to a shift in seasonality in the leisure industry due to

heat waves, and a process of trial and error in operating a new large area after it

opened. We feel the company is making progress on adapting to the new

seasonality, and we are finally starting to see the effect of events such as Tokyo

DisneySea’s 25th anniversary and the opening of the new area. Further, it appears

OLC places more importance on Tokyo Disney Resort’s 45th anniversary in

FY2028 than we thought. This perception gap was likely one reason it took us time

to reassess the pace of management’s strategic response. The company is currently

resolving a number of concerns. We maintain our Overweight rating on OLC.

Raising price target: We raise our estimates, mainly for park attendance, from

FY2026. Based on current market conditions, we raise the risk-free rate of our

DCF model from 1% to 2% and lower the beta from 0.6 to 0.5. WACC is still

3.6%. We expect operating profit to more than double from FY2026 to

FY2043. We see a fair-value P/E of about 29x our FY2035 EPS estimate.

Expecting limited profit decline in 2Q: In 1Q FY2026, the number of days

admission restrictions applied at Tokyo DisneySea reached a record high for

a first quarter of 30. OLC said the number of inbound tourists, especially from

China, was somewhat weak, but was more than offset by family demand from

the Tokyo metropolitan area and other regions. Attendance was also strong in

July. In the second half of August, large typhoons and the like could have

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