Several foreign brokerages hike target prices on positive Largan shares
Several foreign brokerages have raised their target prices on shares of Largan Precision Co. (
) after the smartphone camera lens supplier reported a higher- than- expected gross margin for the first quarter of this year.
Credit Suisse is one of the foreign brokerages which have been upbeat about Largan’s earnings prospects. Credit Suisse said that Largan will continue to take ad- vantage of its lead over its peers in high-end camera lens production technology to secure a high gross margin.
The European brokerage has raised a target price on Largan shares to NT$ 3,280 ( US$ 105) from NT$2,940, while leaving an “outperform” rating on the stock.
After the smartphone camera lens supplier released its first quarter results Thursday, shares of Largan rose 0.90 percent to close at NT$2,810.00 Friday, outperforming the broader market, which ended down 0.88 percent.
Largan announced a first quarter gross margin of 56.7 percent, up about 6 percentage points from the previous quarter, beating market expectations. Market analysts said that Largan has benefited from an improvement in its product portfolio.
In the first quarter, Largan posted NT$32.86 in earnings per share (EPS) for the first quarter of this year, also beating an earlier market estimate. The first quarter figure rose from NT$22.36 recorded in the same period last year, while it fell from NT$55.4 registered in the previous quarter due to slow season effects.
Expecting that Largan will be able to maintain a high gross margin, Credit Suisse has raised its forecast of the smartphone camera lens maker’s earnings per share by 4 percent and 14 percent in 2015 and 2016, respectively, to NT$ 162 and NT$194. In 2014, its EPS stood at NT$144.85.
Barclays Capital has also raised its forecast of Largan’s EPS for 2015 and 2016 by 3 percent and 10 percent, respectively, to NT$ 164.18 and NT$ 212.55 amid similar optimism toward the smartphone camera lens maker.