Credit Suisse Downgrades Himax Technologies (HIMX) to Neutral

(Updated - January 18, 2017 7:58 AM EST)

Credit Suisse downgraded Himax Technologies (NASDAQ: HIMX) from Outperform to Neutral, price target to $6.30 (from $12.00).

Analyst Jerry Su comments "We believe 2017 will be a tough year for Himax since it is losing share in large Display Driver IC (DDI) and its in-cell Touch Display Driver IC (TDDI) is still under qualification. The non-DDI segment is also facing continued ramp down of Argument Reality (AR) devices amid product transition, and we think the new generation products have been pushed out. We downgrade the stock to NEUTRAL with a new TP of US$6.3 (from US$12.00), based on our DCF model, implying 18x 2018E P/E."

He also expects 2017 earnings to fall by 30% YoY, saying "We expect Himax's 2017 sales to decline 3% YoY and GM to trend down 1 pp YoY to 24.7%, given pricing competition and an unfavourable mix. We think there is minimal room for opex reduction and it will result in a negative operating leverage. We cut our 2017-18 EPS to US$0.25/0.34 from US$0.44/0.72. We think Himax is still in a good position to capture the long-term AR opportunity and the new TFT capacity ramp up in China, but we believe 2017 will be a tough year."

For an analyst ratings summary and ratings history on Himax Technologies click here. For more ratings news on Himax Technologies click here.

Shares of Himax Technologies closed at $5.80 yesterday.

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