BofA/Merrill Cuts Himax (HIMX) to Underperform; Sees Highly-Competitive Markets Pressuring Margin Expansion

Bank of America/Merrill Lynch downgraded Himax Technologies, Inc. (Nasdaq: HIMX) from Buy to Underperform and cut its price target from $17.58 down to $12.50.

Analyst Dan Heyler sees Himax competing in a number of highly competitive markets so sharp margin expansion will be difficult without a sharp ramp in LCoS. Mgmt is likely to move forward with capacity expansion but may not be able to fill that capacity until 2015. Hence, 2015 OPM should rise another 2ppt YoY to 13.8 percent.

We lower our 2014/15 EPS (ADR) by 22.7 percent/17.6 percent to US$0.60/US$0.89 from US$0.77/US$1.08 on weaker LCoS and margin projections. We lower our 2014 sales forecast from up 42.3 percent to 27.9 percent but raise 2015E from 30.0 percent to 32.5 percent. Our lowered LCoS impacts our OPM which we’ve taken down 2ppt to 11.8 percent. That still reflects a healthy recovery from 9.6 percent in 2013 and 9.1 percent in 2012, the analyst noted.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• FirstEnergy Corp. (FE) PT Raised to $35 at BofA Securities
• Sandstorm Gold Ltd. (SSL:CN) (SAND) PT Raised to Cdn$10.50 at Canaccord Genuity
• Evercore ISI Downgrades SunPower (SPWR) to In Line