Barclays sees Largan share price going higher
Central News Agency
2014-07-16 11:52 AM
Taipei, July 16 (CNA) British bank Barclays Plc has raised its price target and earnings estimates for Largan Precision Co., which supplies Apple with smartphone camera lenses, on optimism over the iPhone 6 launch and moves to upgrade cameras throughout the industry. Barclays maintained its "overweight" rating for the stock and lifted its target price by 25 percent to NT$3,000 (US$100) -- tying it with UBS's forecast of NT$3,000 on July 9 as the highest among all foreign brokerage firms tracking Largan. The bank also raised its forecast for Largan's earnings per share in 2014 by 4 percent to NT$117.63 and in 2015 by 12 percent to NT$149.32, because of the supplier's advantages in technology and potential increases in average selling price (ASP). "In addition to iPhone 6 strength in the second half of 2014, which we had expected as a catalyst for the stock in 2014, we believe Largan is well positioned for 2015 based on current technology migrations and its leading edge in advanced cameras," Barclays analyst Dale Gai said in a July 14 note to clients. The analyst expects Largan's shipments in 2015 to increase by 20 percent year-on-year and its ASP to rise 12 percent from the previous year. Pushing Largan's ASP higher, Gai said, will be the growing trend among Chinese vendors to use 13-megapixel and 16-megapixel cameras in 1,000-2,000 Chinese yuan (US$160-US$320) smartphones and the greater use of optical image stabilizer (OIS) technology in the sector. Largan could also benefit from an expected upgrade of the iPhone 6S in 2015 to a 13-megapixel camera from the 8-megapixel version to be used in the new iPhone 6, and the increasing penetration of high-end three-dimensional (3D) and dual cameras in smartphones, Gai said. Largan shares had risen 0.19 percent to NT$2,575 as of 11:16 a.m. Wednesday in Taipei. The company is scheduled to host a conference call with investors on Thursday to present its second-quarter financial results. (By Jeffrey Wu)
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