Goldman Sachs yesterday signaled a gloomy outlook for Wistron Corp (緯創) amid concerns that the Taiwanese contract maker will be hurt by its major customer, BlackBerry Ltd, moving away from consumer products.
The brokerage reduced Wistron’s stock rating to “sell” from “neutral” and lowered its price target to NT$22 from NT$27, identifying two major near-term risks for its core business.
“We expect Wistron to be a major loser in terms of notebook ODM [original design manufacturing] allocation in 2014 as it shifts away from low-margin contracts,” Goldman Sachs analyst Robert Yen (嚴柏宇) said.
Although Wistron is considered one of the most diversified notebook ODMs in terms of revenue mix, its notebook and handset businesses combined are still expected to account for more than 60 percent of its revenues this year, Yen said.
He projected Wistron’s revenues will decline 4 percent year-on-year next year, driven by falling notebook and handheld business, and that the market has overestimated the possibility of Wistron becoming a new assembly partner for Apple next year.
Wistron shares ended 2.05 percent lower at NT$28.65 yesterday.