Now trading at a price of $99.75, Sony has moved 2.5% so far today.
Sony returned gains of 15.0% last year, with its stock price reaching a high of $100.94 and a low of $79.62. Over the same period, the stock underperformed the S&P 500 index by -4.9%. As of April 2023, the company's 50-day average price was $89.52. Sony Group Corporation designs, develops, produces, and sells electronic equipment, instruments, and devices for the consumer, professional, and industrial markets in Japan, the United States, Europe, China, the Asia-Pacific, and internationally. Based in Tokyo, Japan, the large-cap Consumer Staples company has 113,000 full time employees. Sony has offered a 82.2% dividend yield over the last 12 months.
Exceptional EPS Growth Obtained Primarily Through Share Buybacks:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $8,543,980 | $8,665,690 | $8,259,890 | $8,999,360 | $9,921,510 | $11,539,800 |
| Revenue Growth | n/a | 1.42% | -4.68% | 8.95% | 10.25% | 16.31% |
| Operating Margins | 9% | 10% | 10% | 11% | 12% | 10% |
| Net Margins | 6% | 11% | 7% | 13% | 9% | 8% |
| Net Income (MM) | $490,794 | $916,271 | $582,191 | $1,171,780 | $888,406 | $943,622 |
| Earnings Per Share | $379.75 | $707.74 | $4612.31 | $9369.02 | $7414.96 | $8005.49 |
| EPS Growth | n/a | 86.37% | 551.7% | 103.13% | -20.86% | 7.96% |
| Diluted Shares (MM) | 1,292 | 1,295 | 126 | 125 | 120 | 118 |
| Free Cash Flow (MM) | $991,981 | $946,096 | $909,989 | $837,911 | $1,233,640 | $314,691 |
| Current Ratio | 0.92 | 0.86 | 0.91 | 0.92 | 0.63 | 0.62 |
| Total Debt (MM) | $623,451 | $568,372 | $634,966 | $773,294 | $1,203,650 | $1,767,700 |
| Net Debt / EBITDA | -0.88 | -0.71 | -0.7 | -0.74 | -0.4 | 0.12 |
Sony has growing revenues and no capital expenditures, decent operating margins with a stable trend, and healthy leverage. However, Sony has exceptional EPS growth obtained primarily through share buybacks, positive cash flows, and not enough current assets to cover current liabilities.
Sony Is Fairly Priced at Current Levels:
Sony has a trailing twelve month P/E ratio of 19.8, compared to an average of 21.21 for the Consumer Staples sector. Based on its EPS guidance of $5.58, the company has a forward P/E ratio of 16.0. The -45.3% compound average growth rate of Sony's historical and projected earnings per share yields a PEG ratio of -0.44. This indicates that its shares are overvalued.In contrast, the market is likely undervaluing Sony in terms of its equity because its P/B ratio is 0.02 while the sector average is 4.12.
Analysts Give Sony an Average Rating of Buy:
The 4 analysts following Sony have set target prices ranging from $104.0 to $142.26 per share, for an average of $118.03 with a buy rating. As of April 2023, the company is trading -24.2% away from its average target price, indicating that there is an analyst consensus of some upside potential.
The largest shareholder is Primecap Management Company, whose 2% stake in the company is worth $2,261,742,771.
