Oh Sony! That's gotta hurt...
(I'm gonna keep this short today) I read this from BusinessWeek Online:
S&P Keeps Strong Sell on Sony
Sony (SNE ): Reiterates 1 STAR (strong sell)Analyst: John Yang
After Sony's move to partly refinance $1.1 billion of bonds under a $2.7 billion shelf registration, we see liquidity challenges as it aims to transform itself with capital-intensive chip investments. With fiscal 2005 (ended March) cash of about $7.3 billion, and free cash flow of $2.7 billion, we don't think Sony can sustain cash outflows needed to expand its chip business, as competitors like Intel and Samsung spend about $4 billion on capital expenditures per year. As we see a likely cash crunch and profit deterioration on higher depreciation, our target price stays $27 on relative price-to-book value and enterprise value-to-EBITDA analyses.
Sony's ended trading today at $33. Time to short?
S&P Keeps Strong Sell on Sony
Sony (SNE ): Reiterates 1 STAR (strong sell)Analyst: John Yang
After Sony's move to partly refinance $1.1 billion of bonds under a $2.7 billion shelf registration, we see liquidity challenges as it aims to transform itself with capital-intensive chip investments. With fiscal 2005 (ended March) cash of about $7.3 billion, and free cash flow of $2.7 billion, we don't think Sony can sustain cash outflows needed to expand its chip business, as competitors like Intel and Samsung spend about $4 billion on capital expenditures per year. As we see a likely cash crunch and profit deterioration on higher depreciation, our target price stays $27 on relative price-to-book value and enterprise value-to-EBITDA analyses.
Sony's ended trading today at $33. Time to short?
posted by L.Su at 7:33 PM
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