Cowen Calls Sony ‘Underappreciated Entertainment Powerhouse’

Cowen began coverage of Sony with an “outperform” rating and a 15,800 yen ($142.36) price target, it said Monday. "We view Sony primarily as a top-tier entertainment company with market leading presences in some of the most attractive entertainment verticals,” like gaming and music, it said. “We think the company unfairly trades at a discount to underlying value due to low-merit concerns about conglomeratization.” The stock closed 0.3% lower Monday on the Tokyo exchange at 12,965 yen. Sony's Gaming & Network Services segment “has been a clear global market leader in video gaming” for more than two decades, said Cowen. The PlayStation 4 finished the last console generation with a larger hardware installed base than any competing platform, and the PS5 “is the early leader in the current generation” that launched in 2020's Q4, it said. Sony's Music segment holds the top share in music publishing and is No. 2 in global recorded music, it said. Sony Pictures is the only major Hollywood-based “film/TV asset” that is not “tethered” to a major streaming service, making it “a film & TV arms merchant to the content-hungry” subscription- and ad-based VOD markets, said Cowen. Sony's core consumer tech segment, Electronic Products & Solutions, “used to be a drag on results but has been significantly rationalized by the company into a consistently profitable business,” it said. It views Sony as “an underappreciated entertainment powerhouse.”