Bullish indicating open at $55-$60, IPO prices at $37
On Friday, Citi analysts issued a new rating for Mercari , Inc (TYO:4385:JP) (OTC:MRCIF), downgrading the company from Buy to Neutral and adjusting the price target from ¥3,500 to ¥2,500. This change in valuation comes as Citi transitions coverage of Mercari to Keiichi Yoneshima, who has updated the firm’s forecasts to include the latest financial results up to the second quarter of FY6/25.
The revised price target is based on projections up to FY6/30 and utilizes a Discounted Cash Flow (DCF) model. Yoneshima expressed a positive view on the expansion of Mercari’s fintech segment but raised concerns about the deceleration in growth of the company’s core business. The analyst acknowledged that while Mercari’s initiatives to cultivate new business avenues appear promising, these ventures are not yet mature enough to be incorporated into their financial forecasts.
Mercari, a Japanese e-commerce company, has been exploring various growth strategies, including the expansion of its fintech services. However, the company’s primary marketplace platform is experiencing a slowdown, prompting Citi to reassess its investment outlook.
The downgrade reflects a cautious stance on the company’s near-term growth prospects, despite recognizing the potential in Mercari’s efforts to diversify its business model. As the market digests this new information, investors may adjust their positions in Mercari stock accordingly.
Citi’s updated analysis and rating adjustment for Mercari highlight the importance of continuous performance evaluation and the impact of shifting market conditions on investment decisions.
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