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On Tuesday, Oppenheimer maintained a positive stance on Sony (NYSE: NYSE:SONY), reiterating an Outperform rating with a steady price target of $108.00. The firm's confidence in Sony is bolstered by anticipated growth in the Gaming & Network Services (G&NS) sector, following the release of the PS5 Pro console and a price hike for the PS5 in Japan.
The price of Sony's PS5 console in Japan went up by approximately 19% starting September 2, 2024. This increase is expected to influence the company's average selling price (ASP) forecasts, as Japan makes up about 10% of the console's sales. Adjustments to the ASP predictions have been made to account for the heightened prices in this segment of the PS5 console unit sales.
Moreover, Oppenheimer's projections include the sale of half a million PS5 Pro consoles in the December quarter, 200,000 units in the March quarter, and another million units in the fiscal year 2025. These figures are incorporated into the firm's financial forecasts.
The anticipated impact of the PS5 price adjustment in Japan, along with the projected shipments of the PS5 Pro console, is expected to increase Sony's G&NS revenue by approximately 2% for both the fiscal year 2024 and 2025 estimates. This positive adjustment reflects the firm's expectation of Sony's performance in the gaming sector due to these strategic moves.
InvestingPro Insights
To complement Oppenheimer's optimistic outlook on Sony's gaming division, InvestingPro data reveals some interesting financial metrics. Sony's revenue growth stands at 11.62% for the last twelve months as of Q1 2023, indicating a solid performance across its diverse business segments. This aligns with the anticipated boost in Gaming & Network Services revenue highlighted in the article.
InvestingPro Tips suggest that Sony is a "Prominent player in the Household Durables industry," which includes its gaming console business. This reinforces the company's strong position in the market as it prepares to launch the PS5 Pro. Additionally, the tip noting that Sony "Has maintained dividend payments for 45 consecutive years" demonstrates the company's financial stability, which could be further strengthened by the expected growth in the gaming sector.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips that could provide deeper insights into Sony's financial health and market position.
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