Market Overview

How iPhone X Weakness Caused A Downgrade Of Sony

Share:
How iPhone X Weakness Caused A Downgrade Of Sony
Related SNE
This Day In Market History: Writer Strike Cripples Hollywood
64 Biggest Movers From Yesterday
'Grinch' steals box-office lead; 'Venom' blows up in China (Seeking Alpha)
Related AAPL
Should Investors Buy Lumentum After Monday's Plunge? The Street Debates
Day After Selloff, Earnings, Trade News Seem To Offer Lift
Fitbit Races To The Bottom, I Step Aside (Seeking Alpha)

Sony Corp (ADR) (NYSE: SNE) has been hitched to the Apple Inc. (NASDAQ: AAPL) gravy trail for a while now, but one Wall Street analyst said the ride is coming to an end.

The Analyst

JPMorgan analyst JJ Park downgraded Sony’s Toyko-listed shares from Overweight to Neutral and lowered the price target for the stock from 5,500 yen ($50.43) to 5,400 yen ($49.51).

The Thesis

The iPhone's momentum is starting to slow, a trend JPMorgan thinks is here to stay, Park said in a Wednesday note. 

“We now forecast iPhone X build to decline 50 percent Q/Q, a similar magnitude to iPhone 8/8+ in 1Q18, and the weakness will continue in 1H18, as high-end smartphones are clearly hitting a plateau along with higher product prices."

Apple singlehandedly accounts for about half of the global CMOS image sensor market, a high-end market in which Sony currently holds about 70 percent market share, according to JPMorgan. 

Sony stock has essentially traded in tandem with Apple over the past two years due to their close relationship, Park said. But while other iPhone suppliers have endured meaningful corrections, Sony has outperformed in the market thanks to the dual-cam device trend. Once that trend starts to slow, Park said, Sony stock will likely no longer outperform.

Given how well the stock has performed, Park says any disappointment on high semiconductor expectations will likely pressure Sony shares.

Price Action

Sony’s U.S.-listed stock was lower by 2.58 percent at the time of publication Wednesday afternoon. 

Related Links:

KeyBanc: Apple Supplier Cirrus Logic Has 'Limited Catalysts'

An Easy-To-Use Cheat Sheet For Apple Suppliers

Photo courtesy of Apple. 

Latest Ratings for SNE

DateFirmActionFromTo
Sep 2018Credit SuisseUpgradesNeutralOutperform
Sep 2017Credit SuisseDowngradesOutperformNeutral
Sep 2017CitigroupDowngradesBuyNeutral

View More Analyst Ratings for SNE
View the Latest Analyst Ratings

Posted-In: Apple Suppliers CMOSAnalyst Color Downgrades Price Target Top Stories Analyst Ratings Tech Best of Benzinga

 

Related Articles (AAPL + SNE)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
ALRMImperial CapitalUpgrades58.0
ANDXSunTrust Robinson HumphreyDowngrades41.0
CMANomuraDowngrades86.0
CSLLongbow ResearchUpgrades122.0
HBANNomuraDowngrades15.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Vetr Crowd Downgrades Lam Research

Tobacco's Big Week