Results: Sony Group Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

Sony Group Corporation (TSE:6758) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results look mixed - while revenue fell marginally short of analyst estimates at JP¥13t, statutory earnings beat expectations 5.2%, with Sony Group reporting profits of JP¥189 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following last week's earnings report, Sony Group's 26 analysts are forecasting 2026 revenues to be JP¥13t, approximately in line with the last 12 months. Statutory earnings per share are expected to reduce 2.2% to JP¥185 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥13t and earnings per share (EPS) of JP¥193 in 2026. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

View our latest analysis for Sony Group

The analysts made no major changes to their price target of JP¥4,271, suggesting the downgrades are not expected to have a long-term impact on Sony Group's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Sony Group analyst has a price target of JP¥4,910 per share, while the most pessimistic values it at JP¥3,600. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Sony Group's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 1.1% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.1% annually. Factoring in the forecast slowdown in growth, it looks like Sony Group is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Sony Group going out to 2028, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Sony Group that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.