Chip stocks fall with Nvidia after data center rev disappointment
Investing.com - Morgan Stanley (NYSE:MS) downgraded CRRC Corporation Limited (HK:1766) (OTC:CRRRF) from Overweight to Equalweight on Monday, while raising its price target to HK$6.40 from HK$5.50.
The investment bank raised its net profit estimates for CRRC by 19% for 2025, 13% for 2026, and 10% for 2027, citing stronger-than-expected railway and new business performance in the first half of 2025, along with lower SG&A expense ratios due to improved cost control.
Morgan Stanley applied a target multiple of 10x 2026 estimated P/E for CRRC’s H-shares, which is largely in line with the company’s 8-year average forward P/E ratio.
Despite the higher price target, the downgrade reflects Morgan Stanley’s view that CRRC’s H-shares now have fair valuation and lack near-term catalysts.
For CRRC’s A-shares, Morgan Stanley increased its price target to RMB8.4 from RMB7.7, applying a 45% A-H premium compared to the previously used 55% premium, which aligns with the stock’s one-year average premium.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.