Sony Corp's <6758.T> shares bounced from a two-month low on Tuesday after the company said it expected operating profit in the current year to be level with the year ended in March, easing worries about the impact of the massive March 11 earthquake and a hacking incident.
The maker of PlayStation video games and Vaio computers said it was targeting an operating profit of 200 billion yen ($2.44 billion) in the year that started in April, prompting Macquarie to upgrade its rating on the stock to outperform from neutral, while Morgan Stanley, Credit Suisse and UBS reiterated their overweight, buy or outperform ratings.
Shares in Sony were up 1.9 percent at 2,253 yen in morning trade, outperforming a flat Tokyo electrical machinery subindex <.IELEC.T>. Shortly after the opening, Sony had slumped to 2,189 yen, down nearly 1 percent and its lowest since the immediate aftermath of the March earthquake.
Analysts said Sony, which estimated its operating profit at 200 billion yen for the year ended on March 31, had provided the market with a realistic view of the impact of the quake and a PlayStation network hacking incident, both of which had weighed on the shares.
Shares are down 23 percent since the quake; but more tellingly, the market cap decline of 264 billion yen since then looks overdone against the 164 billion yen quake plus network breach operating profit impact, Macquarie analyst Jeff Loff wrote in a note to investors.
With shares cheap and cost impacts one-time in nature, we expect the stock to reverse its fall, he wrote.
Credit Suisse analyst Shunsuke Tsuchiya said that shares in Sony were close to bottoming and Morgan Stanley's Masahiro Ono said the announcement cleared uncertainty and was a positive.
Sony is set to announce its full results on Thursday.
(Reporting by Isabel Reynolds and Mayumi Negishi; Editing by Edmund Klamann)