Goldman Sachs Raises SoftBank Target Price to 243 Yen, Maintains Neutral Rating

Overview

Goldman Sachs issued an earnings commentary report on SoftBank (9434.T). Based on Q4 and full-year results for fiscal year 2026, it raised operating profit forecasts for FY3/27-FY3/28 by 3%/2% and increased the 12-month target price from 234 yen to 243 yen. The report believes that mobile price increases, AI-related corporate solutions, and growth in the PayPay financial business will drive earnings, but as current valuation already reflects most of the positives, it maintains a neutral rating.

Core views

Regarding the mobile business, SoftBank is increasing prices for existing plans (e.g., the monthly fee for the Pay-Toku unlimited plan rising from 8,750 yen to 9,250 yen). FY3/27 mobile ARPU is expected to reach 3,880 yen (+4.3%), with user numbers growing moderately to 40.77 million (+0.6%). The corporate business benefits from the full launch of AI data computing infrastructure and large language model solutions, with operating profit expected to grow 20% to 230 billion yen. In the financial business, PayPay payment GMV is expected to grow 22% (transaction volume +16%, transaction value +5%), with operating profit surging 37%. Although the Media & E-commerce business has recovered from the ASKUL system failure, profits only grew moderately by 6% due to weak search advertising. In terms of valuation, Goldman Sachs sets the target price corresponding to a FY3/28E P/E of 19x and an EV/EBITDA multiple of 7.4x (a 5% premium over the industry average of 7.0x). This premium reflects non-telecom growth potential but is reduced from the previous 15% premium due to limited disclosure on AI business and constrained media business growth.

Analysis framework

Goldman Sachs employs a Sum-of-the-Parts (SOTP) valuation method, forecasting revenue and profit for each business segment (Consumer, Corporate, Media & E-commerce, Financial, etc.) separately before aggregating them for overall earnings. For valuation, using FY3/28E as the base year, it applies an EV/EBITDA multiple (7.4x) adjusted for industry average premiums, while also referencing the P/E ratio (19x) for cross-validation. The analytical logic focuses on three key drivers: mobile price hikes boosting ARPU, commercialization progress in AI business, and PayPay's scale effects, while monitoring AI business implementation progress and industry competitive dynamics.

Methodology notes

• Valuation MethodEV/EBITDA valuation

  Applying EV/EBITDA multiple for relative valuation

  Assesses company valuation levels by comparing the ratio of Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization. This report sets SoftBank's EV/EBITDA at 7.4x, a 5% premium over the industry average of 7.0x, reflecting its non-telecom growth advantages, though the premium has narrowed due to AI business uncertainties.

• Company Fundamentals & Financial FrameworkSum-of-the-Parts Valuation

  SOTP Valuation Method

  Values different business segments of a company (e.g., Mobile, Corporate, Financial) separately and sums them up, suitable for diversified business groups. This report independently forecasts earnings for each of SoftBank's segments before synthesizing an overall target price.

• Industry/Sector Analysis FrameworkVolume-Price Split

  Mobile Business ARPU and User Count Split Analysis

  Breaks down revenue growth into drivers of unit price (ARPU) and volume (user count). The report notes that SoftBank's mobile revenue growth is primarily driven by ARPU improvement (+4.3%), while user numbers only increased slightly by 0.6%, reflecting a pricing strategy rather than scale expansion.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• SoftBank (9434.T)

  Direct coverage target, benefiting from mobile price hikes, AI business, and PayPay growth

  Strengths

  Mobile business pricing power, first-mover advantage in AI solutions, PayPay payment ecosystem scale

  Weaknesses

  Constrained growth in Media & E-commerce business, insufficient disclosure on AI business

  Comparison

  Valuation higher than Japan telecom industry average, reflecting expectations for non-telecom business growth

  Risks

  Intensified mobile price competition, AI business progress below expectations, slowing PayPay growth

Key data

• FY3/27 Operating Profit Forecast1.12 trillion yen+7% YoY, exceeding company guidance of 1.10 trillion yen
• 12-Month Target Price243 yenRaised from 234 yen, implying FY3/28E P/E of 19x
• Mobile ARPU (FY3/27E)3,880 yen+4.3% YoY, benefiting from plan price increases
• Corporate Business Operating Profit Growth+20%Driven by full launch of AI solutions business
• PayPay Payment GMV Growth+22%Transaction count +16%, transaction value +5%
• EV/EBITDA Multiple7.4x5% premium over industry average of 7.0x

Impact & implications

The report believes SoftBank's earnings growth drivers are clear, but valuation is already at industry highs (EV/EBITDA premium, P/E of 19x), limiting upside potential. If AI business implementation proceeds smoothly or PayPay continues high growth, valuation premiums could be re-rated; conversely, if mobile competition intensifies or AI progress slows, valuation premiums may narrow further.

Risks

• Mobile plan price increases triggering user churn or intensified competition
• AI-related business implementation progress below expectations
• Continued weakness in search advertising for Media & E-commerce business
• Slowing growth in PayPay payment GMV

What to watch

• Commercialization progress of AI solutions business (e.g., data computing infrastructure, LLM)
• Whether net mobile user additions rebound in the second half of fiscal year 2026
• Changes in growth rates for PayPay payment transaction value and count
• Changes in industry average EV/EBITDA multiples and SoftBank's premium rate