Citi on Sony Group (6758.T): Neutral Maintained – Expects I&SS Improvement and G&NS Acceleration, but Catalysts Remain Scarce
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Citi maintains Neutral on Sony Group (6758.T), raising its target price from ¥3,500 to ¥3,800 on a FY3/27 sum-of-the-parts valuation, with the target EV/EBITDA moving from 8.6x to 9x. The stock rebounded over 10% by late August after July 31 Q1 results, then faded in September—down 4% from pre-results levels—as catalysts were exhausted after State of Play (September 3) and Apple's event (September 10), with yen appreciation also a drag. Citi lifts operating profit forecasts to ¥1.79 trillion for FY3/27 (above guidance; consensus ¥1.74 trillion) and ¥1.78 trillion for FY3/28 (consensus ¥1.80 trillion), plus ¥1.81 trillion for FY3/29, reflecting roughly ¥80 billion of unguided US tariff refunds, better I&SS prospects, Spider-Man: Brand New Day's ~US$2.4 billion global box office through September 6, and Grand Theft Auto VI's November 19 launch (estimated ¥80–90 billion October–December OP contribution). Segment-wise, FY3/27 G&NS OP rises to ¥707 billion and I&SS to ¥427 billion; Pictures reaches ¥161 billion in FY3/27 but falls to ¥157 billion for FY3/28, with no pipeline title of comparable scale. Checkpoints include Marvel's Wolverine (September 15; 3 million units assumed for July–September), Q2 results on November 5, and the new mid-term plan from FY3/28. Beyond these, catalysts remain scarce; Apple's expected iPhone 18 base-model delay to spring 2027 creates sensor-order share risk.
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