Jefferies raises target on SoftBank, notes PayPay as key growth driver

Investing.com -- Jefferies raised its price target on SoftBank (TYO:9984) Corp (TYO:9434) to ¥234 per share, following in-line third-quarter results on strong performance in the Finance and Media&E-commerce segments. Brokerage cited solid core operations and the increasing value of SoftBank’s stake in PayPay, as it reiterated its "Buy" rating.

SoftBank reported a third-quarter operating profit of ¥236 billion, up 8.5% year-over-year and slightly above the consensus estimate of ¥230 billion.

The Finance segment, led by PayPay, turned profitable with an operating profit of ¥12.4 billion, reversing a ¥1.6 billion loss from the previous year. Media&E-commerce also posted strong growth, while the Consumer segment continued to expand steadily.

Jefferies highlighted PayPay’s rapid growth, with sales up 20.6% year-over-year and EBITDA soaring 378.8%.

SoftBank is consolidating its financial operations under PayPay, acquiring majority stakes in PayPay Securities and PayPay Bank to strengthen its ecosystem. Management sees room for further expansion, though a potential PayPay IPO remains a long-term consideration.

With the Finance business outperforming expectations and SoftBank’s brand transition progressing positively, Jefferies slightly adjusted its forecasts, citing better growth prospects in financial services.