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Furthermore, the analysts said headwinds are “biting” for the company, while its market expectations are at risk given the “lacklustre” FY3/25 guidance.
“We continue to expect growing structural challenges in the games business to dampen profit growth below sell-side consensus expectations,” wrote the analysts. The firm recommends a cautious stance at the current share price level after the rise since mid-2022.
“We believe market expectations regarding games business profits are too high, and image sensor profitability may be vulnerable to yen appreciation,” the analysts added.
Despite the downgrade, the analysts did state that they like the planned spin-off of Financial Services and deconsolidation (in 2025), which would reverse the 2020 full merger.
