Nov 10, 2020
Sony Shares Pop On A Solid Standpoint. One Expert Predicts It Could Rise Another 50%
Shares of Sony surged in Tokyo a day after the Japanese gadgets giant raised its yearly benefit forecast. Sony shares in Japan were up by 6.3%, although Japan's more extensive file, the Nikkei 225, was lower by around 0.3%
Sony raised its conjecture for its yearly working pay by 13% to 700 billion yen (approx. $6.7 billion). It came as the firm reported an operating benefit of about 317.8 billion yen (around $3.04 billion) for the three months ended on Sept. 30.
Jefferies Asia's Atul Goyal told CNBC he's "extremely bullish" on Sony. The firm possesses the stock and presently has a purchase rating on Sony, with a value target of 13,230 yen per share — over 50% higher than where the price currently sits.
Sony is set to deliver its next-generation computer game console, PlayStation (PS) 5, which would return on the blockbuster accomplishment of PlayStation 4.
"It is looking very solid, exceptionally strong for PlayStation 5 and the entire cycle that lies in front of us for the following 5 to 6 years," Goyal, a managing chief at Jefferies Asia, told CNBC's "Squawk Box Asia". He featured Sony's cases that the organization got the same number of preorders in 12 hours for the PS5 as it did in 12 weeks for the PS4.
"You would hear deficiencies of PlayStation 5 because there's more demand than supply," the expert said.
It's not because of supply shortages as, "they have been able to recuperate from the supply-side shortages that they were confronting at an opportune time because most of the congregations are happening in China, and the vast majority of the supply chains have recouped almost entirely in China."
"Request is so strong for the item that will keep the news flow, that this item is sold out in many places for some time," Goyal added.
The computer game area has been among the few that have profited from more individuals staying at home because of the Covid pandemic. That has brought up issues over the maintainability of that bounce in a post-pandemic climate.
"The expansion of gaming that we have seen partly is a direct result of staying at home, not just telecommuting, but vacationing from home where individuals are not traveling, and even the weekends you remain at home," Goyal brought up. "A piece of this expansion will be returned, and when Covid disappears, and in my base case it doesn't disappear entirely until the end of 2021."
In any case, he said some of these propensities that have changed because of the pandemic "could last more."
"We're not figuring in (the) following five, six years of Covid-driven profit increment. What we are considering is Playstation 5-driven potential gain, driven by computerized deals," the analysts added.
Looking past Sony's gaming business, which represents a sizable chunk of its working pay, Goyal said the company's music business is "also spectacular" while its picture detecting business is also set to recoup.
"All things considered, this is probably the best organization that we have found in our coverage," he said. "Organizations in these three territories are all duopoly or oligopoly, and Sony's a leader in all of them, with meaningful development ahead."
Economic Calendar Highlights
Germany Unemployment Change: 9:55am
German Unemployment Change measures the change in the number of unemployed people during the previous month.
A higher than expected reading should be taken as negative/bearish for the EUR, while lower than expected reading should be taken as positive/bullish for the EUR.
U.S. Gross Domestic Product (GDP) QoQ: 1:30pm
Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy's health.
Usual Effect: Actual > Forecast = Good for currency
Frequency: Released monthly. There are 3 versions of GDP released a month apart - Advance, second release and Final. Both the advance and the second release are tagged as preliminary in the economic calendar.
U.S. Initial Jobless Claims: 1:30pm
Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week.
A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.
EuroZone Deposit Facility Rate: 1:45pm
The deposit facility is the rate which banks may use to make overnight deposits with the Eurosystem.
Euro Zone Marginal Lending Facility Rate: 1:45pm
The rate on the marginal lending facility, which offers overnight credit to banks from the Eurosystem. This is one of the key interest rates for the euro area the Governing Council of the ECB sets.
European Central Bank Monetary Policy Statement: 1:45pm
European Central Bank Monetary Policy Statement contains the outcome of the ECB's decision on asset purchases and commentary about the economic conditions that influenced their decision.
Eurozone Interest Rate Decision: 1:45pm
The six members of the European Central Bank (ECB) Executive Board and the 16 governors of the euro area central banks vote on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.
A higher than expected rate is positive/bullish for the EUR, while a lower than expected rate is negative/bearish for the EUR.
European Central Bank Press Conference: 2:30pm
The European Central Bank (ECB) press conference is held monthly, about 45 minutes after the Minimum Bid Rate is announced. The conference is approximately an hour long and has two parts. Firstly, a prepared statement is read, then the conference is open to press questions. The press conference examines the factors which affected the ECB's interest rate decision and deals with the overall economic outlook and inflation. Most importantly, it provides clues regarding future monetary policy. High levels of volatility can frequently be observed during the press conference as press questions lead to unscripted answers.
U.S. Pending Home Sales MoM: 3:00pm
The National Association of Realtors (NAR) Pending Home Sales Report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction.
A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.