I don't blame analysts for coming up with a wide divergence of ratings and price targets on Sony Corp (NYSE:SNE). Overall the general direction Sony is heading is positive and that's basically reflected in the fact that there are no really bearish calls as far as I know. A big plus for Sony is the strength of its LCD sales and the success of its JV in panel production with Samsung. However, there are a lot of unknowns such as the release and time to profitability for its forthcoming PlayStation 3. Sony isn't easy to analyze because it is a conglomerate, more like a General Electric (NYSE:GE) than it is a straight consumer electronics play. Nonetheless, here are two analysts' takes published earlier today in Japan.
Morgan Stanley (NYSE:MS) raised its target share price for Sony from 5,300 yen to 5,600 yen while maintaining an "equal-weight" rating. MS will be closely watching the earnings reports by consumer electronics companies at the end of this month. I expect that MS will upgrade Sony following another strong earnings report, which is definitely a possibility based again on strong LCD TV sales and a very beneficial yen/USD FOREX rate.
CSFB rated Sony "outperform" maintaining its 7,500 yen price target. CSFB is eyeing the prospect of Sony's restructuring bearing fruit by the end of the fiscal year (March 2007) and sees operating profit beating market consensus estimates by approximately 19%.
Earlier today in Japan Sony's ordinary shares (Tokyo: 6758) closed lower (-2.51%) at 5,430 yen, for the third consecutive day mirroring the 3-day slump of the Nikkei 225 Stock Average.
Its 5,430 yen closing price converted at Y118/US$1 equals $46.02. Sony's ADRs closed yesterday at $46.36. The 5,600 yen price target at the same FOREX rate equals $47.46, while the 7,500 yen target equals $63.56.
SNE 1-yr chart: