Sony’s increasing exposure to anime content through its Crunchyroll streaming service has positioned it as a top stock to buy, according to investment bank Goldman Sachs. In a recent note, Goldman Sachs upgraded Sony to a Buy rating from Neutral and set a price target of ¥16,000 for its Tokyo-listed shares, indicating a potential upside of nearly 30% from current levels. Sony was also added to Goldman Sachs’ conviction list, which highlights the bank’s top stock ideas.
The acquisition of Crunchyroll from AT&T in 2021 has given Sony a significant foothold in the anime market, and Goldman Sachs expects this move to boost the company’s operating profits and drive global demand for anime content. Previously, overseas consumers had limited access to a broad range of Japanese anime, but the emergence of streaming services has made it easily accessible to anyone with a smartphone, PC, tablet, or other devices.
Goldman Sachs highlights Crunchyroll’s contribution to the growth of anime in overseas markets, predicting that by 2036, these markets will account for 80% of Japanese anime sales. Currently, Crunchyroll has over 10 million paying subscribers and generates an estimated $1 billion in annual revenue. Goldman Sachs expects the subscriber base to double to 20 million by 2027.
Crunchyroll’s unique position as a dedicated anime distribution platform, offering a wide variety and high-quality content, makes it highly appealing to Japanese anime fans. Goldman Sachs suggests that Sony can capitalize on this strength by acquiring and developing exclusive anime content that will attract more fans to sign up for the service.
If Sony manages to expand its Crunchyroll subscriber base, it could improve earnings stability. This is particularly important as the company’s earnings have been heavily reliant on the staggered release of blockbuster games on its PlayStation 5 console. Goldman Sachs anticipates that Crunchyroll’s focus on video distribution and stable revenue from monthly subscription fees will provide a more consistent earnings stream for Sony.
Sony’s move into the anime market aligns with the growing global popularity of the genre. Anime has gained a dedicated fan base worldwide, and streaming services like Crunchyroll have become the go-to platforms for fans to access a wide range of Japanese anime content.
Goldman Sachs’ positive outlook on Sony’s prospects stems from the increasing demand for anime content, a trend that is expected to continue as more consumers seek out unique and engaging forms of entertainment. With its acquisition of Crunchyroll and its position as a leader in other sectors such as gaming and entertainment, Sony is well-positioned to benefit from the growing popularity of anime.
As investors seek opportunities in the fast-growing anime industry, Sony’s stock presents an attractive option. Its strong presence in the market, bolstered by Crunchyroll, is likely to drive future growth and increase shareholder value. Goldman Sachs’ Buy rating and price target reflect the bank’s confidence in Sony’s ability to capitalize on the expanding global appetite for anime content.
