Japan Post Holdings downgraded to Neutral from Buy at Goldman Sachs

Goldman Sachs downgraded Japan Post Holdings to Neutral from Buy with a price target of 2,630 yen, up from 2,420 yen. While the firm has updated its estimates for Japan Post Holdings post quarterly results, reflecting better-than-expected net profit, on the back of strong investment results and higher bond yields, it notes that the company’s leverage to the rising domestic bond yield depends on its ability to drive new policy sales recovery, which is so far lagging management expectations. Therefore, while near-term profit has benefited from the strong domestic and overseas equity markets, Goldman sees limited impact to longer term profitability from the higher bond yields.