Merrill Lynch Japan Upgrades Sharp, Downgrades Sony

| About: Sony Corporation (SNE)
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According to Radio Nikkei, Merrill Lynch Japan Securities upgraded Sharp (SHCAY.pk) from "neutral" to "buy" while downgrading Sony (SNE) from "neutral" to "sell."

ML's target share price for Sharp is 2,300 yen. Sharp (TSE ticker: 6753) closed higher today in Japan up .99% at 2,035 yen. ML estimated Sharp's FY2006 (full year ending March 2007) consolidated profit at 10% above FY2005 to 178 billion yen (approx. US$1.51b at Y118/US$1). Net income growth is seen driven by the 2nd Kameyama Factory for producing LCD-TV panels launching later this year, successful cost cutting measures, and an increase in demand for higher quality mobile phone LCD screens.

ML expects Sony to trade in a range of +/- 10% from 4,600 yen per share. Sony (TSE ticker: 6758) shares were down 2.83% at closing to 5,500 yen. In its report on Sony, ML cited the increasing risk of a short-term correction as the expectations for Sony's shares are too high.

SHCAY 1-yr chart:


SNE 1-yr chart: