Oppenheimer Keeps Their Sell Rating on Himax Technologies

By Carrie Williams

Oppenheimer analyst Andrew Uerkwitz reiterated a Sell rating on Himax Technologies (NASDAQ: HIMX) today and set a price target of $4. The company’s shares closed yesterday at $8.20.

Uerkwitz wrote:

“Our Underperform rating has been and continues to be based on two factors: 1) core business (DDIC) being eroded with technology change and competition; 2) the Street and company overstating the 3D sensing “total solution” opportunity. With no “total solution” revenue yet, we saw a 4Q17 with DDIC revenues down 17% Y/Y, a 1Q18 DDIC guidance up (down ex-automotive) +4% over a weak 1Q17, and gross margin pressure (1Q18 down 200+bps Q/Q). While we think core weakness should not be overlooked, we do believe investors care more about 3D sensing. This is where it gets interesting: it appears capex is delayed and expected year-end capacity (5-6M units/ month) lowered. This led us reiterate Underperform rating and the belief that “total solution” revenues will make minimum contribution.”

According to TipRanks.com, Uerkwitz is a 5-star analyst with an average return of 9.7% and a 59.8% success rate. Uerkwitz covers the Consumer Goods sector, focusing on stocks such as Ribbon Communications Inc, Axon Enterprise Inc, and Tower Semiconductor.

Himax Technologies has an analyst consensus of Moderate Buy, with a price target consensus of $11.43.

Based on Himax Technologies’ latest earnings report for the quarter ending September 30, the company posted quarterly revenue of $6.51 million and quarterly net profit of $121.7K. In comparison, last year the company earned revenue of $206 million and had a net profit of $4.49 million.

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Himax Technologies, Inc. engages in the development and trade of semiconductors. It operates through the Driver Integrated Circuit and Non-Driver Products segments.