Analyst Note| Kazunori Ito |
Sony’s operating income guidance of JPY 930 billion for the new fiscal year is below our forecast of JPY 1 trillion. While entertainment businesses have shown resilience, the imaging and sensing solutions segment’s profitability is below our expectation. We had been optimistic about Sony’s market share recovery in image sensors, but lower-than-expected guidance suggests the competition is intensifying. We expect Sony’s midterm outlook will be revealed at its corporate strategy meeting and IR day, which will be held at the end of May, and we will review our earnings forecast afterwards. We do not plan to make a material change to our fair value estimate of JPY 12,000 as we retain our long-term view that digital content businesses mitigate the cyclicality of hardware businesses under disciplined management.