July 15 2009.

Suzuki shares lost ground in Tokyo today, falling 55 yen to 2,090 yen, as Daiwa Institute of Research Ltd. lowered its investment rating on the automaker yesterday. The institute lowered its rating by one notch to 3 (neutral) from 2 (bullish) on its five-grade scale.

A Daiwa analyst wrote, "Expectations for the automaker's earnings have been overheating to a certain extent." Monday's average market prediction for the firm's group operating profit for the current year through March was 36.9 billion yen, far larger than the company's own prediction of a 10 billion yen profit.

The analyst said investors must carefully consider risk factors, specifically citing:

1) the likelihood that European sales will decrease in reaction to the sales growth buoyed by scrap incentive measures.

2) continued sluggishness in motorcycle sales in the U.S. and Europe.

3) the decelerating domestic market for minivehicles.

Source: Nikkinet