Sony, as a non-U.S. company reliant on consumer preferences and sentiments, is facing increased vulnerability amid the ongoing tariff conflict. This perspective was presented by an analyst who reduced their recommendation for the Asian electronics giant on Monday. Investors appeared to concur, as the company’s stock experienced a decline of nearly 3% on that day, a drop more significant than the S&P 500 index’s 0.2% decrease.
Wolfe Research’s Peter Supino initiated the downgrade before the market opened. In his evaluation, Sony’s stock is now considered a peer perform, or hold, rather than the previous outperform, which suggested a buy. In line with his company’s policy, Supino did not assign a specific price target to the stock.
Reports indicate that Supino’s recent assessment heavily factors in the extensive tariffs implemented by the Trump administration. He expressed concern that the rising costs likely resulting from these measures, along with decreasing consumer confidence, will adversely affect consumer-dependent companies like Sony. Although the company has accumulated some inventory in the U.S., it is expected to be impacted by the weakening consumer dynamic.
Sony, widely regarded as a leading gadget company, is particularly susceptible in the current economic climate. Electronics, often considered non-essential discretionary items, tend to be affected during economic downturns. Supino’s downgrade seems to correspond with the challenges facing Sony’s stock at this time.
