7. Sony Group Corporation (NYSE:SONY)
Number of Hedge Fund Holders: 25
GAMCO Investors’ Stake: $133.8 million
Sony Group Corporation (NYSE:SONY) is engaged in designing, developing, producing, and selling electronic equipment, instruments, and devices for the consumer, professional, and industrial markets. Analyst Jim Hin Kwong Au of DBS maintained a “Buy” rating on the company’s stock. The analyst’s rating is backed by factors including Sony Group Corporation (NYSE:SONY)’s impressive revenue and earnings growth, which were mainly aided by non-first-party game software titles and network services.
Furthermore, the company’s management remains confident in the continued expansion of its game business, says the analyst. Sony Group Corporation (NYSE:SONY)’s competitive edge in CMOS technology and strong growth in game and software services can support the growth trajectory moving forward. Elsewhere, Oppenheimer analyst Martin Yang upped Sony Group Corporation (NYSE:SONY)’s price target to $33 from $25, keeping an “Outperform” rating. The firm’s bullish conviction in the company’s outlook stems from the sustained revenue growth, together with accelerating profit margin expansion at PlayStation.
Aristotle Capital Management, LLC, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Sony Group Corporation (NYSE:SONY), the global provider of videogames and consoles, image sensors, music, and movies, was a top contributor for the period. The company reported strong results driven by third-party gaming revenue and record PlayStation 5 console profitability. This was achieved despite lower console sales, which, in our view, exemplifies the strength of PlayStation’s network effects. PlayStation is the world’s largest gaming platform with 116 million monthly active users, making it an attractive market for game developers and allowing users to play the most advanced games at lower costs than PCs. In its Pictures segment, Crunchyroll (the anime business Sony acquired from AT&T in 2020) signed a distribution agreement with YouTube Primetime Channels, the market share leader in streaming services, which we believe will increase Crunchyroll’s subscriber base. Though a singular example, it illustrates management’s ability to better execute and further improve the segment’s profitability, a catalyst we previously identified. In addition, Sony reported improved sales of image sensors for mobile products as the global smartphone market continued its gradual recovery. Sony’s image sensor business has the largest global market share, and we believe, longer term, it is uniquely positioned to benefit from increasing demand for both autonomous driving technology in vehicles and improved image quality in smartphone cameras. As such, we continue to admire Sony’s capacity to build on its industry leadership and optimize its operations, which includes its plan for a partial spinoff of its Financial Services segment in October 2025.”
