On Friday, Morgan Stanley adjusted its stance on VAT Group AG (VACN:SW), downgrading the inventory from equal weight to underweight and reducing the goal worth from CHF 460 to CHF 350. The revision follows a reassessment of the reminiscence trade’s efficiency and capital expenditures (capex) forecasts.
The downward revision is because of modifications within the world reminiscence market. Earlier this yr, Morgan Stanley strengthened its “obese” ranking on VAT Group, pointing to 4 key drivers of potential outperformance. This optimism relies on indicators of restoration within the reminiscence trade, with robust demand serving to to clear inventories. Nevertheless, latest developments make the outlook much less optimistic.
Morgan Stanley’s world crew revised its view on the reminiscence trade final week, citing a deteriorating pricing atmosphere. This alteration is attributed to the dearth of cyclical restoration in areas apart from synthetic intelligence (AI). Moreover, there was a major delay in NAND capital expenditures, which is at the moment anticipated to proceed into subsequent yr.
Regardless of these setbacks, not all indicators are detrimental. The analyst acknowledged some positives, corresponding to VAT Group’s presence within the Chinese language market and its evolving Gate-All-Round (GAA) know-how. Nevertheless, these elements weren’t sufficient to forestall VAT Group’s revenue forecasts and valuation multiples from being revised downwards.
The revised worth goal of CHF 350 displays the brand new expectations, whereas the downgrade to Underweight indicators Morgan Stanley’s extra cautious view on the inventory. Analyst statements present detailed causes for the funding agency’s change in outlook for VAT Group.
This text was generated with the help of synthetic intelligence and reviewed by an editor. For extra data, please see our phrases and circumstances.
