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Sharp Shares Fall as Citigroup Cuts Price Estimate: Tokyo Mover

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July 12 (Bloomberg) -- Sharp Corp. fell to the lowest level in 34 years in Tokyo trading as Citigroup Inc. cut its share-price estimate for the Japanese electronics maker, saying the company may face continued losses.

Sharp declined as much as 5.6 percent to 336 yen, the lowest intraday price since October 1977, and traded at 338 yen as of 10:39 a.m. Japan’s benchmark Nikkei 225 Stock Average dropped 0.8 percent.

Citigroup, which recommends selling Sharp shares, lowered its price estimate for the stock to 340 yen from 400 yen. The Osaka-based electronics maker probably faces first-quarter losses as its businesses making large liquid-crystal display panels, LCD televisions, mobile phones and solar panels struggle, Citigroup analyst Kota Ezawa said in a note.

Sharp has plunged 36 percent in the past three months as the yen strengthened 9.2 percent against the euro, the most among major currencies, and 1.6 percent against the U.S. dollar, according to data compiled by Bloomberg. A stronger yen cuts the repatriated value of Sharp’s overseas earnings.

The company also fell after the Nikkei newspaper reported Japanese electronics retailer Yamada Denki Co. will spend at least 10 billion yen to raise its stake in domestic competitor Best Denki Co. to more than 50 percent from 7.5 percent. The takeover may enhance Yamada’s bargaining power, lowering the price it pays Sharp for TVs, said Keita Wakabayashi, an analyst at Mito Securities Co. in Tokyo.

“It’s bad for Sharp’s sales and profits if Yamada and Best’s negotiating power grows,” Wakabayashi said. “Sharp has a large share in the domestic market.”

Sharp got 48 percent of revenue from Japan in the year ended March 31, according to data compiled by Bloomberg.

To contact the reporters on this story: Takashi Amano in Tokyo at tamano6@bloomberg.net; Terje Langeland in Tokyo at tlangeland1@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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