Goldman Sachs has upgraded SoftBank Corp. to Buy from Neutral, pointing to a stronger earnings outlook supported by growth in artificial intelligence, advertising and financial services.
Analyst Chikai Tanaka also raised the bank’s price target to 290 yen from 243 yen, suggesting significant potential upside from current levels.
Goldman Raises SoftBank Profit Forecasts
The upgrade follows SoftBank’s fiscal first-quarter results for the April-to-June period.
Goldman Sachs revised its operating profit forecasts higher for the coming years. The bank increased its estimates by 5% for FY2027, 8% for FY2028 and 10% for FY2029.
The improved outlook reflects stronger expectations across several of SoftBank’s major business segments.
AI Solutions and Mobile Revenue Support Growth
One important driver is SoftBank’s enterprise business, where demand for AI solutions continues to expand.
Goldman Sachs also expects higher average revenue per user, or ARPU, in the company’s mobile operations following recent consumer price increases.
Meanwhile, the media and e-commerce business could benefit from recovering advertising demand and greater cost efficiency.
PayPay Strengthens SoftBank’s Financial Business
SoftBank’s financial services division is another important part of Goldman’s bullish outlook.
Growth in PayPay payment volumes, combined with improved cost controls, is expected to strengthen profitability in the financial segment.
Tanaka believes the enterprise, media and e-commerce, and financial businesses could collectively help generate a double-digit annual increase in profits.
New Price Target Suggests 27% Upside
Goldman Sachs’ new 290-yen price target implies approximately 27% upside potential.
That compares with an average upside estimate of slightly more than 10% across the broader sector.
The target is based on an estimated FY2028 price-to-earnings ratio of 22 times and an EV/EBITDA multiple of 7.9 times.
Goldman Applies Higher Valuation Premium
For FY2027, Goldman increased the sector EV/EBITDA multiple used in its valuation to 7.2 times from 7.0 times.
The bank also raised the premium applied to SoftBank from 5% to 10%.
According to Tanaka, the higher premium reflects expectations for stronger medium-term growth and brings the valuation closer to SoftBank’s three-year historical average.
SoftBank Profit Could Beat Company Guidance
Goldman forecasts SoftBank’s FY2027 operating profit at approximately 1.17 trillion yen, representing growth of around 12% year over year.
That figure is above SoftBank’s own guidance of 1.10 trillion yen.
Tanaka sees further upside potential from the media and e-commerce, financial services and other business segments.
AI and Payments Could Drive Long-Term Earnings
Looking beyond FY2027, Goldman Sachs expects SoftBank to maintain strong growth as its AI solutions and financial payment services continue expanding.
The bank forecasts operating profit to grow at a three-year compound annual growth rate of around 11%.
That would significantly exceed the telecom sector’s estimated average growth rate of roughly 5%.
Overall, Goldman’s upgrade reflects growing confidence that SoftBank’s expansion beyond traditional telecommunications, particularly in AI and digital payments, could support stronger earnings over the coming years.
