On Friday, Citi updated its stance on Rohm Co Ltd. (6963:JP) (OTC: ROHCY) shares, with a significant reduction in the company's price target. The new target is set at JPY2,700.00, down from the previous JPY3,400.00, while the firm continues to endorse the stock with a Buy rating.
The adjustment in price target by Citi reflects a recalibration of expectations for the company, shifting the base year to FY3/27. The revision takes into account the ongoing demand downturns in both the industrial and consumer Silicon Carbide (SiC) markets, as well as a tempered outlook for automotive SiC in the longer term.
Despite the lowered forecasts, Citi's analysts believe that Rohm's sales are likely to hit a low in the first half of 2024, with a recovery anticipated into FY3/26. This optimism is based on the expectation of a demand resurgence for existing products and an uptick in SiC volume.
The firm's assessment suggests that the current share price has already factored in a substantial profit decline for FY3/25, positioning Rohm's shares as significantly undervalued.
While near-term catalysts for the stock may be limited, Citi maintains its Buy rating, indicating a positive outlook on the company's potential for recovery.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.