Sony (SONY.US) strong growth prospects have Wolfe Research turning "bullish" ahead of earnings, with the highest target price on Wall Street.

When US President Trump launched a comprehensive tariff policy seven months ago, Wolfe Research analyst Peter Supino downgraded his rating on Sony (SONY.US). Now, that analyst has become the most optimistic bull on this Japanese entertainment and electronics company. In a report released on Wednesday, Peter Supino raised his rating on Sony's Japanese stock to "outperform the market," with a 12-month target price of 5300 yen, the highest target price given by Wall Street, representing about a 25% increase from the stock's closing price on Wednesday. Sony will announce its performance for the second quarter of the 2025 fiscal year ending in September on November 14. Peter Supino stated that his previous concerns about Sony, including gaming consoles and electronic products, facing US tariffs have changed. He said, "We have seen Sony largely control the risks and impact on profits." Reportedly, Peter Supino downgraded his rating on Sony to "peer perform" shortly after Trump announced large-scale tariffs on trading partners in April. This downgrade caused a significant drop in Sony's stock price at the time. The analyst at the time stated that these tariffs raise costs and weakened consumer confidence, posing a "real risk" to companies most vulnerable to changes in disposable income. He also stated that Sony's profit growth prospects were "risky." But now, Peter Supino is more confident in Sony's growth prospects. He pointed out that Sony has a "triple threat" in the gaming, anime, and music sectors, with strong positions in expanding markets for its gaming and music business. The analyst stated, "While Sony's integrated business structure may deter some investors, we have ample evidence that Sony will continue to grow, improve operational efficiency, and prioritize per-share equity value when allocating capital." In Sony's first-quarter financial report for the 2025 fiscal year released in August, the company raised its full-year profit forecast due to accelerated growth in its entertainment business division, easing investors' concerns about the potential damage to Sony's fundamentals from US government tariffs on chip products. The financial report showed that Sony's first-quarter operating profit surged 36.5% year-on-year to 340 billion yen, surpassing analysts' average expectations of about 288 billion yen. The company raised its overall operating profit forecast for the fiscal year ending in March next year by 4% to 1.33 trillion yen (about 9 billion US dollars), roughly in line with analysts' estimates. The company also expects the impact of Trump administration's tariff policy to be 70 billion yen, lower than the approximately 100 billion yen forecasted in May.