Deutsche Bank AG, Goldman Sachs Group Inc and Credit Suisse AG all concluded Asustek’s near-term operations remained on track.
However, the real concern for investors is what happens in the PC industry as a whole, which would definitely impact Asustek in spite of the firm’s improved product portfolio, they said.
“We believe global PC forecasts need to be revised to a high single-digit [percentage] decline year-on-year and 10 percent or more decline for notebooks,” Credit Suisse analyst Thompson Wu (武光明) said in a note on Thursday, while maintaining his “neutral” rating on Asustek’s shares, with a target price of NT$380.
Deutsche Bank kept its “hold” rating and a target price of NT$315 for the company, and Goldman Sachs stayed tune with its “neutral” recommendation but lowered the 12-month target price to NT$350 from NT$380 to reflect the weaker near-term PC market outlook.
However, Citigroup was more bearish about the outlook of Asustek, offering a “sell” rating and a target price of NT$280.
Citigroup analyst Kevin Chang (張凱偉) said Asustek’s and other PC makers’ expectations of a decent industry recovery in the second half driven by the introduction of Intel’s new Haswell processor and low-priced touch notebooks stirred up feelings of deja vu, but last year’s experience of Intel’s Ivy Bridge processor, Windows 8 and lower-price Ultrabook launches proved they were wrong.
“We have been bearish on the PC sector since the start of 2011,” Chang said on Wednesday. “Tablets replacing notebooks as the primary computing device for consumers is a secular trend both in emerging and developed markets, and such secular trend is unlikely to be reversed by tweaks to software or hardware.”