---
endpoint: analytics
pattern: Technology
status: done
latency_ms: 172654
conversation_id: 3f64cd37-04e4-4593-831f-803aeff536b7
citations: 0
created: 2026-05-31 20:30:35Z
---

# How does Sony Group’s valuation compare to peers, and what justifies its premium/discount?

# Sony Group (6758 JP) — Valuation vs. Peers

Sony trades as a **diversified conglomerate** whose multiples sit between cheap consumer-electronics names and richly valued gaming/music pure-plays. CLSA values the company on a sum-of-the-parts (SOTP) basis at **¥4,000 / share (O-PF)**, with an implied blended **12.1x EV/EBITDA on FY3/26 estimates**, reflecting deliberate segment-level premiums (Pictures) and discounts (Games, Semiconductors) [2][4].

## 1. Sony's own multiples (CLSA, priced ¥3,751 on 17 June 2025) [3]

| Metric | FY3/26CL | FY3/27CL | FY3/28CL |
|---|---|---|---|
| Revenue (¥m) | 11,660,000 | 12,170,000 | 11,740,000 |
| Net income (¥m) | 919,400 | 1,019,500 | 1,024,120 |
| EPS (¥) | 152.9 | 169.6 | 170.4 |
| **PE (x)** | **24.5** | **22.1** | **22.0** |
| **PB (x)** | **2.5** | **2.3** | **2.1** |
| EV/EBITDA (x) | 8.7 | 7.7 | 7.2 |
| **ROE (%)** | **10.7** | **10.8** | **9.8** |
| Dividend yield (%) | 0.6 | 0.7 | 0.7 |

Note: peer-comp table shows Sony at PE 20.4x / 18.6x and EV/EBITDA 10.0x / 9.8x for FY3/26 / FY3/27, reflecting a slightly different basis (continuing operations ex-financial services) [1].

## 2. Peer-group benchmarking (CLSA, FY3/26 estimates, priced 17 Jun 2025) [1]

| Segment / Peer set | PE | PB | EV/EBITDA | ROE |
|---|---|---|---|---|
| **Sony Group (6758)** | **20.4** | **2.6** | **10.0** | **12.6** |
| Pictures avg. (Disney, Fox, Paramount, WBD, AMCX, Zee, SunTV) | 11.9 | 1.2 | 7.7 | 9.5 |
| Games/G&NS avg. (EA, TTWO, Nintendo, Capcom, Konami, Bandai, Square Enix, Ubisoft) | 39.4 | 5.5 | 22.8 | 13.9 |
| Music avg. ex Spotify/TME (UMG, WMG) | 23.2 | 11.5 | 15.2 | 61.8 |
| Electronics/E&PS avg. (Samsung, LG, Canon, Nikon, Panasonic) | 12.2 | 0.8 | 5.8 | 7.2 |
| I&SS avg. (Largan, Sunny Optical, Will Semi) | 21.8 | 3.1 | 12.6 | 14.3 |

**Headline read:** Sony's **20.4x PE and 10x EV/EBITDA** trade at a **~70% premium to Japanese consumer-electronics peers** (Panasonic 10.4x PE, Canon 12.1x, Samsung 11.8x — group average 12.2x), at a **~30% discount to Japanese game peers** (Nintendo 41.5x, Capcom 34.5x, Konami 31.7x — group average 39.4x), and roughly **in line / modestly cheaper than music & I&SS** [1].

## 3. Sum-of-the-parts mechanics — where the premium/discount lives [2]

CLSA's SOTP doesn't apply one multiple to the whole group. Each segment receives a deliberate multiple relative to its own peer set:

| Segment | FY3/26 EBITDA (¥bn) | EV/EBITDA used | Implied EV (¥bn) | % of EV | Multiple relative to peers |
|---|---|---|---|---|---|
| G&NS (PlayStation) | 585 | **16.0x** | 9,358 | 37–40% | Game sector average — **no premium** vs. ~22.8x peer avg (Sony underweights "deflationary" peer comp) |
| Music | 460 | **15.0x** | 6,904 | 27–28% | Average of UMG (18.5x) + WMG (11.8x) — **in line** |
| Pictures | 174 | **9.0x** | 1,565 | ~6% | **20% PREMIUM** to blended global+India media avg of 7.8x — higher growth, lower risk than legacy studios |
| I&SS (Image Sensors) | 498 | **9.0x** | 4,485 | ~18% | **30% DISCOUNT** to optical-components avg of 13.2x — higher capex/R&D intensity, lower ROIC |
| HE&S, IP&S, MC (Electronics) | 326 | **5.0x** | 1,629 | ~4% | In line with consumer-electronics peers (~5.8x avg) |
| Eliminations | (110) | 5.0x | (552) | — | — |
| Total EV ex-Financial Services | 1,933 | **12.1x blended** | 23,389 | 100% | — |
| + Net cash, Financial Services (post spin-off), other equity stakes (M3, Bilibili, Spotify, Epic, Kadokawa) | | | 1,777 | | |
| **Net equity value** | | | **25,165** | | |
| **Less 5% conglomerate discount** | | | 23,907 | | |
| **Implied share price** | | | **¥4,000** | | |

## 4. What justifies the premium / discount (CLSA's explicit framework)

CLSA states the valuation philosophy directly: **"the pictures division deserves a premium; games and semiconductors deserves a discount; and electronics should be in line with peers"** [4]. The reasoning by segment:

- **Pictures (+20% premium):** Higher growth and lower risk than the blended global + India peer set. Cross-IP monetisation (PlayStation Studios adaptations — *The Last of Us*, *Helldivers*, *Horizon*; Crunchyroll anime; Kadokawa ~10% stake) gives Sony a structural advantage versus pure-play studios facing tariff and content-spend headwinds.

- **Games / G&NS (discount via using only sector-average multiple, despite Sony's superior install base):** Risk of being forced into the **"deflationary model adopted by peer Microsoft"** — aggressive acquisitions and giveaways. CLSA also flags peer concentration risk: Take-Two trades at 87.7x PE FY3/26 on the GTA6 catalyst (now delayed to May 2026), Nintendo at 41.5x on Switch 2, both unsustainable multiples [5].

- **I&SS / Semiconductors (-30% discount):** Heavy capex and R&D intensity, **uncertain ROIC (CLSA notes targets cut to 12–15%)**, and **~60% customer concentration with Apple for mobile image sensors** — significant earnings-contraction risk if Apple diversifies suppliers on upcoming iPhone models [5]. CLSA argues Sony "ultimately needs to formulate an exit strategy ahead of the 6th MRP" — potentially a semiconductor spin-off as a rerating catalyst.

- **Electronics (HE&S / IP&S / MC) — in line:** Mature markets, demand risk in TVs/cameras/mobile, no reason to deviate from Panasonic / Canon / Samsung at ~5x EV/EBITDA.

- **5% group-level conglomerate discount:** Standard penalty for diversified holding-company structure; CLSA assigns only **20% credit to Financial Services post the planned Oct 2025 spin-off** [4].

## 5. Why Sony screens premium to consumer-electronics peers but discount to gaming peers

The headline ~20x PE is a **mix shift outcome, not a rating call**:

1. **PlayStation (37–40% of SOTP EV) anchors the high end** — applying gaming-peer multiples (16x EBITDA) to a segment that earns ¥450bn EBIT lifts the whole-group multiple above electronics peers.
2. **Music (~27% of EV)** trades at ~15x EBITDA, dragging the blend further away from the 5–6x EBITDA of pure consumer electronics.
3. **Electronics & semis (~22% of EV combined)** discount the group toward CE multiples, which is why Sony does NOT trade at 30–40x PE like Nintendo/Capcom.
4. **Conglomerate discount (5%)** caps the rerating until Sony executes the financial-services spin (Oct 2025) and addresses the semiconductor portfolio.

## 6. Catalysts that could close the residual discount

CLSA argues Sony "could rerate over medium-to-long term via semiconductor spin-off and a strong PS6 cycle, shifting the group to an entertainment-focused business with higher recurring growth and FCF conversion" [4]. Specific catalysts:

- **Oct 2025:** Financial Services IPO/spin-off; majority-share sale to existing shareholders raises payout capacity (target ~40% by FY3/27, vs. current ~15% [3]).
- **G&NS rerating** if Microsoft de-emphasises Xbox hardware — would tighten 1P/3P content moats around PlayStation.
- **Semiconductor exit / spin-off** under new president Hiroki Totoki — removes the lowest-multiple, highest-capex segment from the SOTP.
- **PS6 cycle** (expected ~FY3/27 onward) — drives FY3/27 OP to ¥1,530bn (from FY3/26's ¥1,260bn) [3].

## 7. Key risks to the premium [5]

- **Apple concentration (~60% of I&SS mobile demand)** — earnings-contraction risk if Apple diversifies suppliers.
- **Yen strength (¥140/$ assumption)** — every 1-yen appreciation cuts ~¥85bn group OP, most heavily in I&SS.
- **GTA6 delay (now May 2026)** has already pushed earnings growth from FY3/26 to FY3/27, raising near-term consensus-miss risk.
- **Microsoft's "deflationary model" in games**, and content-spend slowdown at major streamers (Netflix, Disney, WBD) pressuring Pictures.
- **5% conglomerate discount could widen** if portfolio review under Totoki stalls or M&A integration disappoints.

## 8. Bottom line

Sony's valuation is best understood as a **deliberately constructed SOTP blend**, not a simple multiple call:

- **Headline 20x PE / 10x EV/EBITDA** = significant premium to electronics peers (Samsung/Panasonic/Canon at ~12x PE) and discount to gaming peers (Nintendo/Capcom at ~30–40x PE).
- The **premium is justified** by the entertainment mix (Games + Music + Pictures ≈ 70% of EV) and reinforced by a **20% Pictures premium** for cross-IP advantages.
- The **discount embedded in the SOTP** lives in Semiconductors (-30% vs. optical-components peers) and at the group level (5% conglomerate discount).
- **Closing the gap to a pure entertainment multiple** requires: (i) Financial Services spin-off (Oct 2025), (ii) semiconductor exit/spin-off, (iii) higher payout, and (iv) PS6 cycle execution.

---

**Sources**
[1] *Sony Group - O-PF (Semiconductor meeting)* — CLSA, 18 June 2025 — 607962284LinqAlpha.PDF (peer valuation matrix: Pictures, G&NS, Music, E&PS, I&SS, FY3/26–FY3/27 PE / PB / EV/EBITDA / ROE)
[2] *Sony Group - O-PF (Semiconductor meeting)* — CLSA, 18 June 2025 — 607962284LinqAlpha.PDF (SOTP table — segment EV/EBITDA, implied EV ¥23,389bn, implied share price ¥4,000)
[3] *Sony Group - O-PF (Semiconductor meeting)* — CLSA, 18 June 2025 — 607962284LinqAlpha.PDF (Sony financial summary FY3/24A–FY3/28CL: revenue, OP, EPS, PE, PB, ROE)
[4] *Sony Group - O-PF (Semiconductor meeting)* — CLSA, 18 June 2025 — 607962284LinqAlpha.PDF (valuation philosophy: pictures premium, games/semis discount, electronics in line)
[5] *Sony Group - O-PF (Semiconductor meeting)* — CLSA, 18 June 2025 — 607962284LinqAlpha.PDF (investment risks: Apple concentration, Microsoft deflationary model, mature-market demand)

