Nomura Downgrades Himax (HIMX) to Neutral on Lower AR Shipment Forecasts
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Nomura Securities downgraded Himax Technologies (NASDAQ: HIMX) from Buy to Neutral with a price target of $10.20 (from $12.00) on lower AR shipment forecasts.
Analyst Donnie Teng commented, "Upon raising our TP in our 2 September report “Himax (HIMX US, Buy) - Better pricing on LCOS and WLO”, we indicated that Himax has received some positive pricing increases for its LCOS (liquid crystal on silicon) and WLO (wafer level optics) for its major AR (augmented reality) device. But according to our checks recently, the potential upside may be offset by the weaker shipments for the major AR device, as more meaningful volume for the device may not take off until 2H17. Thus, we cut our TP from USD12 to USD10.2, based on a target P/E of 18x and our revised 2018F EPS forecast of USD0.57 (previously USD0.67), and cut our rating from Buy to Neutral, as: 1) there is not enough upside to sustain our previous Buy rating and TP, especially as shipments may disappoint again and the stock is at 26x 2017F P/E now; 2) we believe Himax is still a good proxy to the long-term AR story, as we mentioned in our upgrade report “Himax (HIMX US, Buy) - Better riskreward after expectation reset” on 5 July."
Shares of Himax Technologies closed at $10.73 yesterday.
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