On Wednesday, Citi increased its stock price target for Softbank (OTC:SFTBY) Corp. (9434:JP) (OTC: SFBQF) shares to JPY2,300 from JPY2,200, while maintaining a Buy rating on the stock. This adjustment follows the company's first-quarter results, which led to an upward revision of the full-year forecasts for March 2025.
The revised forecast for operating profit (OP) and earnings per share (EPS) for the fiscal year ending March 2025 is now JPY 965 billion and JPY 116, respectively. This is an increase from the previous forecast of JPY 908 billion for OP and JPY 108 for EPS. The new estimates surpass Softbank's own guidance of JPY 900 billion for OP and JPY 105 for EPS, as well as the consensus estimates of JPY 929.6 billion for OP and JPY 109 for EPS.
Despite the dividend yield for the fiscal year 2025 being projected at 4.3%, which aligns with the global telecom sector's average of 4.6%, and the total return yield being slightly below the average at 4.3% compared to 6.4%, Citi sees several factors that could drive the stock's appeal. Among these factors are the strong profit growth and the potential initial public offering (IPO) of PayPay, a financial technology platform.
Citi continues to favor Softbank Corp. as its top pick within the telecom sector, citing multiple catalysts that could enhance the stock's value. The firm's positive stance on Softbank reflects confidence in the company's financial performance and strategic initiatives moving forward.
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