Mizuho analysts highlighted one tech stock they see further upside for in a note to clients this week, raising its target.
The stock in question is Sony (NYSE:SONY). Mizhuo lifted the target price to ¥21,100, representing a potential 45% upside. This increase follows a positive company update and a 5% rally in Sony's Japanese shares.
The firm acknowledges that Sony stock has been frustrating for investors, partly due to conservative management guidance and pressure from the global smartphone market correction. However, analysts remain optimistic about the company's outlook, predicting a "solid rebound in operating profit" in Sony's fiscal year ending June 2025 (FY25).
Mizuho's estimates project 11% annual growth in Sony's operating profit over the next two years, exceeding analyst consensus. While not a high-growth story, Sony trades at an attractive valuation of 14.5x P/E and 8.8x EV/EBITDA based on Mizuho's FY26 estimates.
Analysts highlight several positive factors for Sony. The company's medium-term plan emphasizes share repurchases alongside profit growth, demonstrating a commitment to shareholder returns. Additionally, Sony's ambitious target for a 10% or more consolidated operating profit CAGR is viewed as achievable by Mizuho. The firm also forecasts record profits in Sony's Gaming & Network Services and Imaging & Sensing Solutions segments in the coming years.
Mizuho believes Sony is under-owned and presents a compelling buying opportunity due to its upside potential and focus on shareholder returns. They are confident in Sony's ability to expand profitability in its gaming and sensor businesses. Mizhuo reiterated Sony as a "top long idea."