AMS: Credit Suisse downgrades buy rating
(CercleFinance.com) - Credit Suisse has downgraded its buy rating ("outperform") on the share of Austrian semiconductor group AMS (listed in Zurich).
As a supplier of Apple, the broker has now adopted a "neutral" rating on the share.
Indeed, analysts are worried about weak Q4 sales forecasts for and have slashed their target price for the share by 40% from 67 Swiss francs to 40 Swiss francs.
The broker's research note welcomes AMS' positioning in optical sensors, a strong growth market in which the group is expected to record 1.5 billion euros in sales in 2018, followed by 2.2 billion euros in 2020, particularly thanks to Apple and Chinese mobile phone manufacturers operating under the Android system. "However, this still falls short of company's target of Eu2.2bn in 2019," its note says.
In addition, Credit Suisse is not convinced about the future improvement in gross margin, in particular thanks to products supplied to Apple, believing that this would only be gradual and that it lacks visibility. Indeed, each year Apple could reselect suppliers for its entry-level models.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
As a supplier of Apple, the broker has now adopted a "neutral" rating on the share.
Indeed, analysts are worried about weak Q4 sales forecasts for and have slashed their target price for the share by 40% from 67 Swiss francs to 40 Swiss francs.
The broker's research note welcomes AMS' positioning in optical sensors, a strong growth market in which the group is expected to record 1.5 billion euros in sales in 2018, followed by 2.2 billion euros in 2020, particularly thanks to Apple and Chinese mobile phone manufacturers operating under the Android system. "However, this still falls short of company's target of Eu2.2bn in 2019," its note says.
In addition, Credit Suisse is not convinced about the future improvement in gross margin, in particular thanks to products supplied to Apple, believing that this would only be gradual and that it lacks visibility. Indeed, each year Apple could reselect suppliers for its entry-level models.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.