Cautious Outlook on KDDI: Sell Rating Amidst Growth Challenges and Strategic Dependencies

KDDI (KDDIF – Research Report), the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Atul Goyal from Jefferies maintained a Sell rating on the stock and has a Yen1,865.00 price target.

Atul Goyal has given his Sell rating due to a combination of factors influencing KDDI’s future performance. Despite KDDI’s Q4 FY3/25 operating profit surpassing expectations, the guidance for FY3/26 remains below consensus, indicating potential challenges ahead. The company’s future growth heavily relies on the recovery of average revenue per user (ARPU) and the successful integration of Lawson, which are critical areas of concern.
Furthermore, while there is confidence in the business services sector, driven by IoT and data center expansion, the overall outlook suggests that these factors may not be sufficient to offset the broader challenges faced by KDDI. The telecom sector’s tailwinds are expected to support some growth, but the combination of these uncertainties and dependencies leads to a cautious stance, justifying the Sell rating.

According to TipRanks, Goyal is a 5-star analyst with an average return of 12.5% and a 66.26% success rate. Goyal covers the Communication Services sector, focusing on stocks such as Nintendo Co, Capcom Co, and SoftBank Group.