Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Sony Group Corp (NYSE: SONY) is engaged in the games & network services (G&NS), music, movies, electronics products & solutions (EP&S), imaging & sensing solutions (I&SS), finance and other businesses. 

Kalkine’s Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 87% in the last three months, furthermore corrected by 4.73% in past nine months.
• The stock is in its lower band of its 52-week range of USD 100.94 and 52-week low price of USD 75.11. Post the announcement of FY24 results the stock has given a return of 2.69% with the current price near an important support of USD 75-USD 78.
• The price is currently trading below both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 38.15.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~4.68% of the total shareholding, signifying diverse shareholding. PRIMECAP Management Company, and Aristotle Capital Management, LLC are the biggest shareholders, holding the maximum stake in the company at ~1.79% and ~0.88%, respectively.

1.4 Key Metrics

In fiscal year 2024, Sony significantly outperformed industry medians in key financial metrics, highlighting its robust operational efficiency and profitability. Sony achieved a gross margin of 36.6%, well above the industry median of 27.4%, demonstrating its effective cost management and strong revenue generation capabilities. Additionally, Sony's EBITDA margin stood at 18.0%, surpassing the industry median of 14.5%, which underscores its superior ability to generate earnings before interest, taxes, depreciation, and amortization, further cementing its position as a leader in the industry.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of FY24:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 87% in the last three months, furthermore corrected by 4.73% in past nine months.
• The stock is in its lower band of its 52-week range of USD 100.94 and 52-week low price of USD 75.11. Post the announcement of FY24 results the stock has given a return of 2.69% with the current price near an important support of USD 75-USD 78.
• The price is currently trading below both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 38.15.

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 29, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.