Sony (SONY) Exceeds Market Returns: Some Facts to Consider

Sony (SONY) closed at $26.30 in the latest trading session, marking a +2.98% move from the prior day. The stock exceeded the S&P 500, which registered a gain of 0.52% for the day. Meanwhile, the Dow gained 1%, and the Nasdaq, a tech-heavy index, added 0.52%.

Coming into today, shares of the electronics and media company had lost 4.06% in the past month. In that same time, the Consumer Discretionary sector gained 6.1%, while the S&P 500 gained 5.95%.

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Investors will be eagerly watching for the performance of Sony in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.23, reflecting a 4.17% decrease from the same quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.16 per share and a revenue of $79.87 billion, representing changes of -5.69% and -6.09%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Sony. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 2.52% lower. Sony is currently a Zacks Rank #5 (Strong Sell).

With respect to valuation, Sony is currently being traded at a Forward P/E ratio of 22.02. This represents a discount compared to its industry average Forward P/E of 35.69.

It's also important to note that SONY currently trades at a PEG ratio of 12.3. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Audio Video Production industry stood at 12.3 at the close of the market yesterday.

The Audio Video Production industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 195, positioning it in the bottom 21% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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