ANALYSIS: New Products Could Help Revive Sony Shares
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TOKYO (Nikkei)--Sony Corp.'s (6758) stock price has been stuck around 2,000 yen since hitting a year-to-date high of 2,413 yen in May.
The shares had a nine-session winning streak from late-August to early-September as investors pinned their hopes on new products from the consumer electronics firm. Now they are waiting to see whether these products add to Sony's bottom line.
The company's TV business returned to the black in the April-June period for the first time in 12 quarters, indicating that earnings have begun bottoming out. At the same time, however, the company cut its sales target for TVs and other products.
On Sept. 4, Sony released a new smartphone and lens system that it hopes will be a hit. At an event held Sept. 17 by a securities firm, Sony President and CEO Kazuo Hirai said the company has created a risk-taking environment that will be good for product development.
Merrill Lynch Japan Securities Co. analyst Eiichi Katayama said Sony has entered a phase where it can develop strong new products. But one domestic institutional investor was more skeptical, saying although its new products will attract interest, it is too early to say whether they will help the company's earnings recover.
Sony's stock has more than doubled in value since the start of the year and its price-to-earnings ratio is now around 40, making the issue less attractive to bargain hunters. Whether the stock can break out of its box depends on the success of the new products it will launch in October.