Raising EPS by 11%/22%, PO to US$13 (18% upside potential)
We raise our 2014/15E EPS by 11%/22% to US$0.67/US$0.88 while our PO goes
from $8.46 to $13.00. We have increased our target P/E (NTM) from 15.8x to
19.5x which is Himax’s peak-cycle multiple. Our recent NDR/discussions with
mgmt increase our confidence in HIMX’s growth and margin prospects in LCOS
(wearable electronics), touch panel ICs, and wafer level optics (array cameras).
DDI appears on-track for modest recovery, while…
We expect 3Q13 to meet the upper end of guidance (down 5-12 % QoQ) – driven
by mobile, touch IC and mobile booster. DDI revenue should fall 10% QoQ but
should recover 5% in 3Q13. Small/medium (S/M) DDI is likely to decline 7% QoQ
while large DDI could drop 15% QoQ due to market share loss (to Novatek).
4Q13 sales should recover 5% QoQ due to mobile upside from China’s strong
smartphones/tablet demand and Samsung (catch-up orders after shortages).
New business trends are encouraging
We still don’t anticipate upside to LCOS until 2Q14 but our checks indicate that:
(1) development is broadening to more customers and segments and that;
(2) head-gear designs are improving (less bulky). We still are unable to detect any
viable competitors while new-entrants may need 1-2 years to match Himax’s
capabilities in: (1) technology; and (2) manufacturing cost. We also see Himax
taking share in the touch IC market at the expense of Cypress and others. Its
high-end solution is being scaled for lower-end, whitebox phones. We also think
its WLO sales should accelerate in 2014 driven by cost-down and thinner devices.
haschultz--Tried to link additional info from report and I think Yahoo will allow it. BoA (Merill Lynch) has had a buy rating on the stock since I've owned it--late April time frame, with a rating of C 1 7. The latest report was dated 10/3 /2013; their previous target was $8.46. This is the first target I've seen above $12 and IMHO is the reason Cramer said 13-14 the other night on his show as that's when the report came out.
I do not see Bank of America following this company.. Had it been a new recommendation it would have been worthy of a PR... Therefore until I can verify I have to take it with a grain of salt ...
Get a Merrill Edge account and you can read it for yourself which is owned by Bof A. They bought Merrill Lynch during the financial crisis.. I have one and the report is legitmate because I read it last night. I also have accounts with TdAmeritrade and Trade King. These brokers accounts have different analysis so its nice to find out more information and made a formal decision. TdAmeritrade has S&P for stock r picks witha 5 star rating.Good luck
Himax Technologies, Inc: Broader, stronger products; raise PO and EPS10/2/2013 9:00 PM
We raise our 2014/15E EPS by 11%/22% to US$0.67/0.88 driven by LCOS, touch IC, CIS, WLO and sustainable, strong growth from smartphone/tablet. Raise target P/E to 19.5x.
Download PDF Report (260kb) »