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Ghosn: Nissan shares to rise on sound fundamentals

TOKYO, June 26 (Reuters) - Carlos Ghosn, chief executive officer of Nissan Motor Co , said on Thursday he expected the auto maker's shares to climb further based on the company's fundamental strength, after the stock hit a 13-year high last week.

"Nissan's fundamentals are sound, so long-term -- say over the next three or six months -- there is no doubt in my mind that the shares will move up," Ghosn told a group of reporters after a news conference to announce the new Presage minivan.

Last Wednesday, Nissan's shares touched a 13-year high of 1,142 yen aided by a softer yen, but also on widespread views that the stock was underpriced considering the company's earnings prospects on the back of its numerous new models.

In Thursday afternoon trade, Nissan's shares were up 2.35 percent at 1,087 yen, outperforming its rivals and the Nikkei 225 average , which was down 0.83 percent.

Despite the shrinking U.S. and European auto markets, Nissan, along with its main Japanese competitors, has been gaining market share in those regions at the expense of local players, while expanding rapidly in the fledgling Asian markets.

Last month, Japan's third-largest auto maker kicked off production at its new plant in Canton, Mississippi.

The plant has a total output capacity of 400,000 units and began rolling out the much-anticipated Quest minivan due for launch in the United States in July.

Ghosn, who has gained celebrity status in Japan for turning around a near-bankrupt Nissan, said he expected the Japanese market to continue to stagnate, but added he was confident Nissan would achieve sales growth even with fewer new models this year.

In the fiercely competitive domestic market, Nissan has so far outperformed Toyota Motor Corp and Honda Motor Co , with its non-mini vehicle sales for the first five months of 2003 rising 8.6 percent from the year before.

Toyota's sales rose 5.1 percent and Honda's plunged 17 percent over the same period.

"I can tell you that in June, we sold at least the same number of cars that we sold last year," Ghosn said. Sales figures for this month are due for release on July 1.

Nissan expects the momentum to pick up even further with the launch of the Presage minivan, with monthly sales targeted at 5,000 units in Japan. The auto maker has no plans to export the model.

Most analysts agree Nissan's shares are due for a further uptick, barring a sharp downturn in the U.S. economy or rise in the yen.

"We think Nissan shares are likely to post the strongest short-term relative performance in the automotive sector," Takaki Nakanishi, auto analyst at UBS, wrote in a recent report.

Based on an estimated EV/EBITDA (enterprise value/earnings before interest, taxes, depreciation and amortisation) of five times for next business year, Nakanishi raised Nissan's price target to 1,320 yen from 1,040 yen.

J.P. Morgan auto analyst Steve Usher also said Nissan's shares, even at last week's 13-year high, were still cheap with the EV/EBITDA around 4.4 times compared with over five for both Toyota and Honda.