Macquarie Research Equities yesterday downgraded ratings of Largan Precision Co (
"Room for further increases in forecasts and expectations for this year's handset industry is limited," the firm's analyst Nicholas Teo (趙常順) said in a report yesterday.
Low visibility beyond the first quarter and lower-than-expected handset shipments in the first half of the year may give rise to an inventory glut in handset camera lenses, he said.
Macquarie's rating of Largan was downgraded to "neutral" from "outperform."
"Though we are very positive on Largan's competitiveness and market leadership, we see limited scope for upside in its share prices," Teo said.
The company's stock has already re-rated, rallying by 443 percent to its recent record high of NT$653 (US$20.26) since its low on January 18th last year, he added.
Macquarie estimated Largan's 12-month price target to be NT$605, 9 percent above its closing price of NT$555 on the Taiwan Stock Exchange yesterday.
Meanwhile, Macquarie's rating of Genius was also downgraded from "outperform" to "underperform," mainly due to production yield problems.
The ratings agency's EPS forecast for Genius this year was slashed by 40 percent to NT$17.26, followed by a 43 percent cut for next year to NT$21.83.
The 12-month price target is forecast at NT$276, which is down 15.21 percent from its TAIEX closing price of NT$325.5 yesterday.
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