As a non-U.S. company quite dependent on the tastes and sentiments of consumers, Sony (NYSE: SONY) is particularly vulnerable in the current tariff war.
That, at least, was the take from an analyst who downgraded his recommendation on the Asian electronics giant on Monday. Judging by their reaction, investors readily agreed, as they sent the company's stock to a nearly 3% loss in price Monday. That fall was steeper than the S&P 500 index's 0.2% slide on the day.
The tariffs will be trouble
Before market open, Wolfe Research's Peter Supino enacted the downgrade. In his view, Sony is now only a peer perform (read: hold), as opposed to the outperform (buy) of previously. As per his company's policy, he did not assign a price target to the stock.
According to reports, Supino's latest take is based heavily on -- no surprise -- the sweeping tariffs imposed by the Trump administration. His concern is that the rising costs that are likely to arise from such measures, combined with declining consumer confidence, will sap business from consumer-dependent companies like Sony.
The pundit added that while the company has stockpiled a certain amount of inventory in this country, it will still feel the impact of a weakening consumer dynamic.
Not a good time for the gadget gang
Sony, which in many ways is the world's ultimate gadget company, is definitely vulnerable in the current environment. Electronics are already non-essential (for the most part) discretionary items, and they tend to be affected in slumps like the one that's surely coming. I think Supino's downgrade is, unfortunately, appropriate for Sony stock at this time.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $244,570!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $35,715!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $461,558!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
Continue »
*Stock Advisor returns as of April 5, 2025
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
