Aeon Financial Service: Lowering our rating to Neutral

研报英文原文证据摘录

Aeon Financial Service: Lowering our rating to Neutral

Global Markets Research

19 June 2026Aeon Financial Service

8570.T 8570 JP / EQUITY: JAPAN INSURANCE & DIVERSIFIED FINANCIALS

Lowering our rating to Neutral RatingDown from Buy Neutral

We lower our forecasts to reflect higher system costs, think reassessment Target price

JPY 1,500will hinge on improvement in card competitiveness Reduced from 2,150

We see limited upside versus our revised target price Closing price 18 June 2026 JPY 1,474.0We lower our earnings forecasts and target price for Aeon Financial Service, and lower

our rating to Neutral as we now see limited upside versus our target price. We lower our Implied upside +1.8%near-term profit forecasts to reflect lower gains on the securitization of receivables and

higher IT system costs. While we expect profit levels to fall temporarily, we retain our

growth outlook for the core credit card business and expect profits to remain on an upward

trajectory overall. Accordingly, we obtain our target price of ¥1,500 by multiplying our 28/2 Relative performance chart

EPS forecast of ¥123 by a P/E of 12x (previously 13x).

Earnings forecasts: We lower our profit forecasts for Japan to factor in higher IT

system costs and smaller securitization gains

We lower our operating profit forecasts for 27/2 to ¥51.5bn (a 28% downward revision), for

28/2 to ¥63.9bn (19%), and for 29/2 to ¥74.7bn (16%). For system costs, we raise our

assumption for depreciation for core credit card systems to reflect a shorter depreciation

period than we had previously assumed, and add costs that we had not incorporated in

our earlier forecasts such as replacement work expenses, disposal losses, and upfront

investments including in AEON Pay and AI applications. We lower our forecasts for gains