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Jefferies Increases Sony’s Price Target to 5,150 Yen

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Dec. 4 2020, Updated 10:52 a.m. ET

Price movement

Sony (SNE) has a market cap of $37.2 billion. It fell by 2.7% to close at $32.50 per share on August 1, 2016.

The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 8.9%, 10.7%, and 32.1%, respectively, on the same day. SNE is trading 7.2% above its 20-day moving average, 12.2% above its 50-day moving average, and 25.4% above its 200-day moving average.

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Related ETF and peers

The Vanguard FTSE Pacific ETF (VPL) invests 0.56% of its holdings in Sony. The ETF tracks the FTSE Developed Asia Pacific Index, a market cap–weighted index of securities in the developed markets of the Pacific region. The YTD price movement of VPL was 5.1% on August 1.

The market caps of Sony’s competitors are as follows:

  • Canon (CAJ) — $36.6 billion
  • Harman International Industries (HAR) — $5.9 billion
  • Dolby Laboratories (DLB) — $5.0 billion

Sony’s rating

Jefferies has increased Sony’s price target to 5,150 yen from 5,100 yen, and it’s maintained the stock’s rating of a “buy.”

TheStreet Ratings rated the stock as a “hold” with a score of C+.

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Latest news on Sony

In a press release on August 1, 2016, Reuters reported, “EU (European Union) antitrust regulators on Monday cleared Sony Corp.’s bid to buy out Michael Jackson’s stake in its music publishing joint venture, the world’s largest with copyrights to the Beatles’ songs and songs by Taylor Swift.”

The release added, “The European Commission said the deal would not hurt competition in the recorded music and music publishing industries.”

Performance of Sony in 1Q16

Sony reported 1Q16 sales and operating revenue of 1.6 trillion Japanese yen, a fall of 10.8% compared to sales and operating revenue of 1.8 trillion yen in 1Q15.

Sales and operating revenue from the company’s mobile communications (or MC), imaging products & solutions (or IP&S), home entertainment & sound (or HE&S), semiconductors, components, and financial services segments fell by 33.9%, 26.4%, 7.0%, 21.4%, 22.8%, and 16.8%, respectively.

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Sales and operating revenues from the company’s game and network services (GNS), pictures, and music segments rose by 16.9%, 6.8%, and 8.7%, respectively, in 1Q16 compared to 1Q15. Sony reported a gain of 50.8 billion yen on the sale of securities investments in 1Q16, compared to 72 million yen in 1Q15. The company’s operating income fell by 42.0% in 1Q16 compared to the prior year’s period.

Sony’s net income and EPS (earnings per share) fell to 21.2 billion yen and 16.44 yen, respectively, in 1Q16, compared to 82.4 billion yen and 70.36 yen, respectively, in 1Q15.

SNE’s cash and cash equivalents fell by 35.8%, and its inventories rose by 5.1% in 1Q16 compared to 4Q15. Its current ratio fell to 0.85x, and its debt-to-equity ratio rose to 4.34x in 1Q16 compared to a current ratio and a debt-to-equity ratio of 0.87x and 4.33x, respectively, in 4Q15.

Projections

The company has made the following projections for 2016:

  • sales and operating revenue of 7.4 trillion yen
  • operating income of 300 billion yen
  • income before income taxes of 270 billion yen
  • net income of 80.0 billion yen
  • sales and operating revenue growth from MC, G&NS, IP&S, HE&S, semiconductors, components, pictures, music, and financial services of -25.5%, 2.5%, -21.1%, -13.7%, -5.3%, -11.0%, -1.9%, -11.0%, and 6.2%, respectively.

The above sales forecast includes the impact of foreign exchange rates and falls in the MC, pictures, and G&NS segments’ sales.

 Now we’ll take a look at Harley-Davidson.

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