(Bloomberg) -- Rakuten Group Inc. shares climbed to the highest level since April 2022 after brokerage firms including Morgan Stanley MUFG Securities Co. raised their price target for the Japanese e-commerce firm on its mobile business success.
The stock advanced as much as 9.8%, the most in two weeks, as MS-MUFG analysts including Tetsuro Tsusaka wrote that a fair value of ¥1,500 could be plausible from its mobile business contribution.
“Competitiveness is recovering with network quality improving, prices looking more appealing versus competitors and synergies from the Rakuten ecosystem,” he wrote. The firm raised its price target to ¥1,300 from ¥1,100.
The company’s shares have surged more than 30% since reporting a narrowing operating loss thanks to steady progress in its mobile business. The conglomerate faced heavy pressure to turn the business profitable after struggling with mounting losses and debt ever since its 2020 foray into the saturated wireless carrier market dominated by larger rivals. Rakuten is preparing for about ¥500 billion worth of bond redemptions through 2025.
Citi also increased its price target to ¥1,100 from ¥900 and revised up its telecom EBITDA forecasts, citing similar success in the telecom unit. Rakuten was the best performer on the Nikkei 225 Stock Index today.
--With assistance from Toshiro Hasegawa.
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