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<Research>Nomura Adds TP of LENOVO GROUP (00992.HK) to $11, Expects Accelerated Delivery of AI Servers From June
Recommend 12 Positive 18 Negative 9 |
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Nomura wrote in a report that LENOVO GROUP (00992.HK) has been one of the broker's preferred stocks among Hong Kong tech stocks since 2H23. LENOVO's share price hiked 47% last year, compared with a 17% decline in the HSI over the same period. The broker expected LENOVO's outlook for FY25 to improve as it benefits from demand for personal computers and a potential recovery in its server business. Nomura said LENOVO's performance so far this year could still be improved due to a modest recovery in the PC market, geopolitical issues and concerns about the potential restructuring costs of its server business. However, the broker believed there is potential upside for LENOVO's share price, given the favourable profitability outlook for its hardware business, more opportunities in its artificial intelligence server business and restructuring costs offset by strong earnings. While Nomura expected LENOVO management's outlook to likely not become positive until 2HFY24 when order visibility stretches further, the broker has raised its FY24 to FY26 earnings forecast by 2% to 5%. It also believed that AI server shipments may accelerate from June onwards, driven by the H20 and H200 chips. The broker raised its target price on LENOVO from $10 to $11 and maintained its Buy rating. AAStocks Financial News |
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