Trump Tariffs Pose Real Risk to Sony Profit Forecasts, Analyst Warns

Wolfe Research's Peter Supino downgraded the stock’s Tokyo-listed shares, which fell 10% on Monday The post Trump Tariffs Pose Real Risk to Sony Profit Forecasts, Analyst Warns appeared first on TheWrap.

Apr 7, 2025 - 18:18

Trump Tariffs Pose Real Risk to Sony Profit Forecasts, Analyst Warns

Wolfe Research’s Peter Supino has downgraded Tokyo-listed shares of Sony Group Corporation’s stock, warning that rising costs and weakening consumer confidence from President Donald Trump’s reciprocal tariffs could pose a “real risk” to the Japanese multinational conglomerate’s profit forecasts.

Supino, who downgraded the stock from an “outperform” to “peer perform” rating, estimates that roughly 30% of Sony’s customer sales are derived from the U.S., while around 70% of its core operating profits, excluding financial services, come from consumer discretionary segments such as video games, consumer electronics and image sensors.

“Sony faces a risky [fiscal year 2025] outlook for both topline and operating profit growth,” Supino wrote in a Monday research note. “While Sony has already stockpiled some inventory in the U.S. to soften the impact, the fact remains that Sony’s conglomerate structure will be relatively more pressured compared to other companies within our coverage. The stock arguably remains undervalued, but given these are ‘abnormal’ times and estimate revisions skew to the downside, Sony’s risk/reward shifts from positive to neutral.”

In February, Sony raised its full year outlook for fiscal 2024, anticipating total sales of 13.2 trillion yen ($86 billion), an operating profit of 1.34 billion yen ($8.7 million) and a net income of 1.8 trillion yen ($12 billion), up 4%, 2% and 10% from the previous guidance, respectively.

Despite lowering its estimates for the full 2025 year to reflect “topline softness and rising costs related to the broader U.S./macro backdrop,” Wolfe Research anticipates Sony will continue to execute against its forecast targets to grow operating income and margins by 10% per year between fiscal year 2024 and fiscal year 2026.

Tokyo-listed shares of Sony fell 10% on Monday and are down 8.8% year to date. However, they are still up 17.5% in the past year and 7% in the past six months.

The post Trump Tariffs Pose Real Risk to Sony Profit Forecasts, Analyst Warns appeared first on TheWrap.