2023-07-12 13:32:26 ET
Sony stock ( NYSE: SONY ) jumped 2.7% early Wednesday afternoon as Goldman Sachs turned positive and added the name to its Conviction Buy list -- and not because of competing headlines from rival Microsoft's pursuit of Activision Blizzard.
"We turn bullish on Sony in the expectation that investors will shift focus from the company's hardware to its software content along with growth in its Japanese anime-related business and its full-fledged entry into live service game titles," analyst Minami Munakata says in upgrading Sony to a Buy.
Meanwhile, a 3% correction in the share price since April earnings have offered a nice entry point, Munakata said.
Goldman expects a boost from "robust" growth in the Japanese anime industry, and "meaningful expansion" at Sony's anime platform Crunchyroll, as well as a full-scale entry into live service game distribution in the company's Game and Network Services segment.
That's leading the firm to raise 2024-2028 operating profit forecasts by 4% to 13% -- and to about 9% to 19% higher than consensus expectations: "As the earnings contribution from Crunchyroll and live service games becomes clearer from [fiscal 2025] in quarterly results, we see potential for both consensus and valuation multiples for the pictures business to rise."
That also means a boost to its sum-of-the-parts target price: to ¥16,000 from ¥13,500, implying 29% upside from Tokyo pricing.
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Sony rises as Goldman Sachs adds to Conviction Buy list on anime, live games