23.10.2013 Morgan Stanley's Masahiro Ono today reiterates an Equal Weight rating on shares of Sony, writing that there is short-term upside for the stock of 16% given the weaker Japanese Yen, though he's still concerned about weakness in the TV business and a raft of other problems at the company. The thrust of Ono's report is that Sony is relatively more attractive than a bunch of other electronics names such as Casio, Panasonic, Yamaha, and Sharp. Ono cut his price target to ¥2,200 from ¥2,400. The ordinary shares (6758JP) today declined ¥39, or 2%, to ¥1,896 in Tokyo trading. “Based on recent industry contacts, we understand Sony’s share of TV sales is down, the PC mkt is shrinking more and costs for new game launches are up,” writes Ono. Higher relative appeal on expanding valuations stemming from weak yen and rising stock market. Increased scope for relative upside in the industry. That said, firm’s mid-term plan still has optimistic view for F3/15. While growth strategy is clear, assumes numerous hit products in core biz. Steps to cope with loss-making biz unclear beside TV biz. Ono thinks operating profit can beat current consensus in the fiscal year ending in March, projecting ¥233.8 billion, versus the mid-point of estimates of ¥220.9, but he points out that “Our F3/14 est. reflects c.¥30bn for the additional sale of assets, so we are essentially below consensus.” |
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