Macquarie has opened coverage on Rakuten with an Outperform rating and a target price of ¥1,100 per share, citing what it describes as an earnings inflection point for the Japanese internet and fintech conglomerate.
The brokerage said the "worst is over" for Rakuten and set out a forecast that sees fiscal 2026 revenue at ¥2.88 trillion, representing a 15.2% increase year-on-year. It projects non-GAAP operating profit of ¥244 billion for FY2026, which would be more than double the prior year figure. Macquarie expects operating profit to rise a further 36.6% in FY2027 and 31.8% in FY2028, with growth attributed to expansion in the group's FinTech businesses and a narrowing of losses in its mobile unit.
Macquarie highlighted Rakuten's ecosystem as a structural advantage, noting the group's integration across e-commerce, payments, banking, securities and mobile services. The brokerage said this ecosystem should boost customer lifetime value through cross-selling opportunities, supporting higher profitability for the group over time.
The broker also flagged an October reorganization of Rakuten's financial businesses, saying the plan should improve funding efficiency, simplify the corporate structure and help unlock higher valuations for its FinTech operations. Macquarie anticipates these corporate changes will be value-accretive if executed as intended.
On the mobile side, Macquarie sees a turning point. It noted Rakuten Mobile recorded its first full-year EBITDA profit in fiscal 2025 and achieved its first quarterly EBITDA profit in the first quarter of fiscal 2026. With the subscriber base now above 10 million, the brokerage said scale benefits are starting to become evident. At the same time, Macquarie cautioned that elevated network investment is likely to continue through FY2027 before capital expenditure reaches its peak.
Valuation is based on a sum-of-the-parts analysis. Macquarie assigns ¥1.8 trillion to Rakuten's internet services arm, ¥1.6 trillion to its attributable FinTech stake and ¥259 billion to the mobile segment, arriving at the ¥1,100 per-share target.
Key points
- Macquarie starts coverage on Rakuten with an Outperform rating and a ¥1,100 target price.
- The broker forecasts FY2026 revenue of ¥2.88 trillion and non-GAAP operating profit of ¥244 billion, with further operating-profit growth in FY2027 and FY2028 driven by FinTech and narrowing mobile losses.
- Rakuten's integrated ecosystem and an October reorganization of its financial businesses are expected to improve customer cross-selling, funding efficiency and valuation of FinTech assets.
Risks and uncertainties
- Refinancing risk for debt maturing in 2027 could affect the group's financial flexibility and funding costs.
- Mobile metrics could fail to improve as expected - slower-than-anticipated subscriber trends or operational setbacks would dampen the mobile turnaround thesis.
- There is a possibility of additional impairment losses, which could weaken earnings and balance-sheet strength.
Macquarie's view places emphasis on improving cash generation from mobile operations and continued momentum in financial services, but the broker's scenario depends on execution of the planned restructuring and on capital spending that remains elevated in the near term. The brokerage's sum-of-the-parts valuation underpins its ¥1,100 target, while noted downside risks center on refinancing, mobile execution and potential impairments.