Sure they can, but they are in a competitive market. While you can't let your competitor's actions dictate your strategy, you are still competing for the limited funds of consumers and you don't want to be taking on any larger loss than necessary. Microsoft have the more powerful system and trying to sell PS5 at Series X price parity wouldn't look good. Traditionally, cheaper consoles have always sold better and faster so being price conscious is smart.
Sony don't need to underprice PS5 at launch, it's going to sell.