Several foreign brokerages have raised their target prices for shares of metal casings supplier Catcher Technology Co (可成) in anticipation that its earnings will rise after Apple Inc unveils its next-generation iPhone.
The upgrades also came after the firm reported a more than 20 percent sequential increase in net profit in the second quarter and a gross margin that was the company’s highest in 11 quarters.
One of the brokerages, Macquarie Securities, hiked its target price for Catcher shares to NT$366 from NT$361, saying the improvement in gross margin had dispelled market fears that the yield rate for the upcoming iPhone’s casings was low.
As a supplier of components for Apple products, Catcher is thought to have begun shipping casings to the US firm in the second quarter in preparation for the launch of the new iPhone in the third quarter, expected next month.
Catcher shares closed down 0.17 percent at NT$289 on Friday on the Taiwan Stock Exchange as investors locked in gains built after the company released its second-quarter results on Monday last week.
Catcher shares rose 10.7 percent last week from the opening of trading on Monday to Thursday’s close.
In the April-June period, Catcher posted NT$3.64 billion (US$121.5 million) in net profit, up 22.1 percent from a quarter earlier, with earnings per share (EPS) at NT$4.84, up from NT$3.97.
Its gross margin stood at 49.2 percent, up 7.9 percentage points from a quarter earlier.
Macquarie said that because the second-quarter results beat market expectations, it had raised its forecast for Catcher’s EPS for this year by 6.27 percent to NT$23.08. Catcher’s EPS last year was NT$18.38.
It has also hiked its estimates of Catcher’s EPS for next year and 2016 by 1.3 percent and 0.69 percent to NT$26.11 and NT$28.54 respectively.
Macquarie added that it had left its “outperform” recommendation on Catcher shares unchanged.
Equally bullish on Catcher, Daiwa Securities said it had raised its target price on Catcher shares to NT$315 from NT$296 and left its “outperform” rating unchanged.
Meanwhile, Barclays Capital boosted its target price from NT$310 to NT$330 and left its “overweight” recommendation intact.
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