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Seiko Epson Shares Jump After Goldman Raises Rating
July
07 — Shares of Seiko Epson Corp., the world’s second-biggest maker of
inkjet printers, climbed to their highest in two years after Goldman
Sachs Group Inc. upgraded the stock to “buy,” citing improved
earnings.The stock rose 5.7 percent to close at 4,090 yen on the Tokyo
Stock Exchange, the highest since March 18, 2005. Seiko Epson shares
gained 42 percent in the past six months, compared with a 6.2 percent
advance in the Topix index.Goldman Sachs expects higher sales of inkjet
printers and mobile-phone liquid-crystal displays to bolster profit,
according to a report dated yesterday. The brokerage raised its annual
operating profit estimate by 19 percent to 71 billion yen ($577
million), and the sales forecast by 1.3 percent to 1.41 trillion yen,
exceeding Seiko Epson’s projections.“The company’s shipments of
liquid-crystal displays for mobile phones are expected to be bullish,”
wrote Shin Horie, who upgraded the rating on Suwa, central Japan-based
Seiko Epson from “neutral.” Cost cuts and increased sales from new
printer products in Europe will improve Seiko Epson’s competitiveness
against Hewlett-Packard Co., Canon Inc. and Lexmark International Inc.,
Goldman Sachs said.Seiko Epson forecast on April 26 operating profit,
or sales minus the cost of goods sold and administrative expenses, will
rise 21 percent to 61 billion yen in the year ending March 31. Sales
are expected to fall 1.6 percent to 1.39 trillion yen, the company
said.
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