On Wednesday, Deutsche Bank (ETR:DBKGn) adjusted its outlook on IQE Plc. (LON:IQE:LN) (OTC: IQEPF) shares, a supplier of compound semiconductor wafer products, by reducing its price target to GBP0.45 from GBP0.55. Despite the adjustment, the firm continues to endorse a Buy rating on the stock.
The revision reflects a cautious stance towards the global semiconductor market's pace of recovery. IQE has reportedly been making strides in its business plan, with adjusted EBITDA for the first half of the financial year 2024 surpassing expectations. However, the overall sector is experiencing a sluggish recovery, as noted by several of IQE's peers.
The lowered forecasts for FY24 are in alignment with IQE's most recent guidance, suggesting a conservative approach by Deutsche Bank. The firm anticipates that IQE will recuperate some of the lost ground in the future, which has led to the updated discounted cash flow (DCF) based price target.
Despite the price target reduction, Deutsche Bank's analysis indicates a potential upside of over 90% from IQE's last closing price. This optimistic projection supports the firm's decision to maintain a Buy rating on the stock. The new price target and rating reflect the bank's current assessment of IQE's performance and market conditions.
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