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Investing.com - JPMorgan has initiated coverage on Rakuten Inc . (TYO:4755:JP) with an Overweight rating and a price target of JPY1,150.00, citing the company’s improving mobile segment and expanding ecosystem.
The Japanese e-commerce and digital services company has experienced share price weakness since December 2017 due to concerns about growing investment burdens in its mobile segment, according to JPMorgan. The firm notes that these losses are now diminishing, positioning Rakuten for improved financial performance.
JPMorgan expects Rakuten to further expand its price advantage in the mobile segment while addressing connection issues and strengthening customer support. These improvements should lead to accelerating net subscriber growth and average revenue per user (ARPU) growth.
The analysis highlights Rakuten’s fintech segment as another area of strength, with Rakuten Card and Rakuten Bank increasingly becoming primary financial service providers for their users. This contributes to what JPMorgan describes as a "multilayered ecosystem" spanning mobile, marketplace, and financial services.
From a financial perspective, JPMorgan believes Rakuten’s credit risk will remain limited as free cash flow improves, supporting the firm’s positive outlook on the stock through its December 2026 price target.
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