- Sony’s growing exposure to anime content has made it a top stock to own, according to Goldman Sachs.
- The bank upgraded Sony to a buy rating and added the stock to its confidence list with a price target suggesting a 29% gain.
- “We believe Crunchyroll is well positioned to benefit from the acceleration of Japanese anime consumption overseas,” Goldman said.
Sony is a top stock to own due to increased exposure to anime content through its streaming service Crunchyroll, according to a memo released Wednesday by Goldman Sachs.
The bank upgraded Sony from “neutral” to “buy” and set a target price for its Tokyo-listed stock at ¥16,000, suggesting a potential upside of nearly 30% from current levels. For Sony’s ADR stock, the price target would be around $115. Goldman has also added Sony to its conviction list, which highlights the bank’s leading equity idea.
Sony Acquiring Crunchyroll from AT&T in 2021, Goldman expects the anime-focused streaming service to boost its operating profit, boosting demand for anime content around the world.
“Until now, consumers overseas have had no means of accessing a wide range of Japanese anime, but the advent of streaming services has made anime content accessible to all consumers using devices such as smartphones, PCs, and tablets. ,” Goldman explained. .
The bank said Crunchyroll has contributed significantly to the growth of anime in overseas markets and will account for 80% of Japan’s anime sales by 2036.
Crunchyroll currently has over 10 million paying subscribers and an estimated annual revenue of $1 billion. Goldman expects that number to double to 20 million subscribers by 2027.
“Crunchyroll is uniquely positioned as an anime-only distribution platform … Crunchyroll is currently positioned as the most attractive platform for anime fans in Japan in terms of both quantity and quality of content,” said Goldman.
Content quality is a pain point for many anime fans, and Goldman said Sony can play to its strengths by acquiring and developing exclusive anime content that entice fans to subscribe to the service.
If Sony succeeds in growing Crunchyroll’s subscriber base, it could reduce the impact of staggered releases of blockbuster games on the PlayStation 5 console and improve revenue stability.
“In addition, Crunchyroll’s business is centered on video distribution, which accounts for the majority of monthly subscription fees, so we expect a stable contribution to revenue.Therefore, Sony’s future revenue We expect to be less dependent on our single-year gaming and entertainment content pipeline,” Goldman said.