On Tuesday, Jefferies made an adjustment to the price target for Faraday Technology Corp (3035:TT), reducing it to NT$378.00 from the previous NT$502.00. Despite this change, the firm has maintained its Buy rating on the stock.
The adjustment comes as Faraday Technology's shares are currently trading at NT$293.00. The new price target suggests a 29% potential upside, with the valuation based on a discounted cash flow (DCF) method. The revised target price corresponds to a 37x 2025 estimated price-to-earnings (PE) ratio and a 0.7x price-to-earnings growth (PEG) ratio.
The decision to lower the price target is attributed to the ongoing weakness and inventory adjustments in the industrial market throughout 2024. This sector's persistent challenges have necessitated a reassessment of Faraday's future financial performance.
Despite the near-term headwinds, Jefferies remains optimistic about Faraday's long-term prospects. The company's partnerships, particularly with Arm in the artificial intelligence and automotive ecosystems, as well as collaborations with leading foundries on advanced FinFET projects, are highlighted as key factors supporting this positive outlook.
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