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Sony Group Corp SONY

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Morningstar’s Analysis

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Sony’s Lower Margin Guidance for Image Sensors Implies Intensifying Competition

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.

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Company Profile

Business Description

Sony Group Corp is a conglomerate with consumer electronics roots, which not only designs, develops, produces, and sells electronic equipment and devices, but also is engaged in content businesses, such as console and mobile games, music, and movies. Sony is a global top company of CMOS image sensors, game consoles, professional broadcasting cameras, and music publishing, and is one of the top players on digital cameras, wireless earphones, recorded music, and movies, and so on. Sony's business portfolio is well diversified with six major business segments. The company fully consolidated Sony Financial in September 2020, which provides life and non-life insurance, banking, and other financial services.

Contact
7-1, Konan 1-Chome, Minato-ku
Tokyo, 108-0075, Japan
T +81 367482111
Sector Technology
Industry Consumer Electronics
Most Recent Earnings Dec 31, 2020
Fiscal Year End Mar 31, 2021
Stock Type
Employees 111,700

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