On Tuesday, Softbank (OTC:SFTBY) Corp. (9434:JP) (OTC: SFBQF) received an upgrade in its stock rating by Jefferies, moving from Hold to Buy. The firm also raised its price target for Softbank from ¥1,850.00 to ¥2,270.00. The positive revision reflects a potential upside of 16% along with a dividend yield (DY) of 4.4%.
The upgrade by Jefferies is based on seven key reasons that position Softbank favorably in the market. Among these reasons, two are particularly highlighted: the anticipated benefits from a likely PayPay listing and the company's advantageous position as Japan's gateway for AI data centers (DCs). Softbank's connection with NVIDIA (NASDAQ:NVDA) is seen as a strategic asset in this respect.
In addition to these factors, the analyst pointed out Softbank's attractive dividend yield, which stands higher than that of competitor KDDI (OTC:KDDIF) at 3%. The firm's focused business strategy, which does not involve diversifying into unrelated business ventures unlike KDDI's acquisition of Lawson, is also seen as a positive for Softbank's stock outlook.
The new stock price target of ¥2,270 indicates confidence in Softbank's potential for growth and shareholder returns. It is also an acknowledgment of Softbank's strategic positioning within the technology sector, especially in the areas of payment services and artificial intelligence infrastructure. The upgrade and new price target suggest that Jefferies sees a strong investment case for Softbank at this time.
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