The upside to Nidec Corp (NYSE:NJ) seems to make sense to everyone but as is usually the case there are always limits. Nidec had its target share price cut earlier this month by Credit Suisse (NYSE:CSR) to 10,500 yen from 12,000 yen based on lower sector valuation. Monday in Japan, Merrill Lynch (MER) did the same, cutting its target to 9,200 yen from 10,700 yen. Nevertheless, Nidec (Tokyo: 6594) gained 2.3% to close at 7,500 yen and its ADRs are up over 5% intra-day.
Merrill Lynch lowered its P/E estimate for Nidec to 30 from 35 inline with its expectations for the sector. Like Credit Suisse, it doesn't see any need to revise its estimates for Nidec's financials. Its rating for Nidec was not published, however Credit Suisse is maintaining its "outperform" rating.
Nidec's ADRs trade at a 4:1 listing ratio, thus today's 7,500 yen ordinary share closing price equates to $16.10 for its ADRs, which traded as high as $16.54 intra-day at the time of publishing.
* Merrill's 9,200 yen target equals $19.75.
* Credit Suisse's 10,500 yen target equals $22.54.
Nidec Corp (NJ) 1-year chart: