Shareholders in Rakuten Bank, Ltd. (TSE:5838) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. The market seems to be pricing in some improvement in the business too, with the stock up 5.6% over the past week, closing at JP¥5,777. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
After the upgrade, the six analysts covering Rakuten Bank are now predicting revenues of JP¥246b in 2027. If met, this would reflect a decent 19% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to rise 4.8% to JP¥464. Before this latest update, the analysts had been forecasting revenues of JP¥213b and earnings per share (EPS) of JP¥454 in 2027. Sentiment certainly seems to have improved in recent times, with a substantial gain in revenue and a small increase to earnings per share estimates.
Check out our latest analysis for Rakuten Bank
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Rakuten Bank's growth to accelerate, with the forecast 25% annualised growth to the end of 2027 ranking favourably alongside historical growth of 21% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Rakuten Bank to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Rakuten Bank.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Rakuten Bank analysts - going out to 2029, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.
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