Baird Sees Himax (HIMX) EPS Rebound in 2016

Baird analyst, Tristan Gerra, reiterated his $9 PT and Outperform rating on Himax Technologies (NASDAQ: HIMX) due to an expected EPS rebound in 2016.

A recent rebound in the China smartphone market and new smartphone design win should continue to benefit Himax's 1Q revenue, which combined with the AMOLED ramp should mitigate seasonal inventory adjustments post Chinese New Year,

AMOLED represents a slightly incremental mix opportunity for Himax's driver business. Management expects smartphone driver IC revenue to increase 10-15% in 2016, driven by the AMOLED shipment ramp and new China smartphone design win. Himax is scheduled to start shipping AMOLED drivers to Samsung's low and mid-range smartphones in 1Q and is also engaged with another OEM for OLED-based 4K TVs.

Himax expects a 30%+ increase in large driver IC revenue this year, in part driven by 4K TVs. Himax's market share at China panel makers is increasing, driven by BOE, with cost reductions expected to offset the impact of lower ASPs. The analyst expects the non-China 4K TV market to grow 70% YoY in 2016.

The $9 price target on HIMX is based on 20x Baird's 2017 EPS estimate (ex. stock option) of $0.45

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 $7.21 yesterday.

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