Deutsche Bank Initiates Infineon Technologies AG (IFX) with a Buy
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Deutsche Bank initiates coverage on Infineon Technologies AG (NYSE: IFX) with a Buy rating.
The firm believes that the company's restructuring program and an organic wireless profitability turnaround should help turnaround IFX’s depressed profitability. Also, Deutsche Bank highlights that the Semi industry ex-DRAM is relatively resilient to macro weakness and the firm's forecasts already assume softness in Infineon's end markets. Finally, the firm views valuation favorably with multiples below historical troughs and views the divestment of Qimonda as a short-term catalyst.
The firm said, "Depressed margins and a soft macro outlook lead the market to price in all-time low prospects for Infineon. Yet we see margins and profitability recovering over the next 12 months: 1) design wins should add substantial incremental revenues in the wireless division; 2) a cost-cutting program has been launched to address sub-peer margins; and 3) management seeks to lower exposure or fully exit its heavily loss-making and capital-intensive DRAM subsidiary Qimonda by Q109."
Infineon Technologies AG is a semiconductor company.
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Qimonda
JOE on Aug 6, 2008 11:29 AMQimonda is a great company! They need to get out from under Infineon's dark cloud and negative press...