Street Calls of the Week
Investing.com - Goldman Sachs has upgraded Sysmex Corporation (6869:JP) (OTC:SSMXY) from Neutral to Buy, while slightly lowering its price target to JPY2,400.00 from JPY2,500.00.
The upgrade comes as Goldman Sachs sees Sysmex shares entering a phase where medium to long-term growth expectations will be re-evaluated following confirmation of an earnings bottom and improvement from the previous quarter.
Goldman Sachs notes that while earnings uncertainty remains, particularly in Sysmex’s China business, these concerns appear largely priced into the stock, which has underperformed since April, falling 34% compared to TOPIX’s 22% gain.
The firm views Sysmex’s current valuation as attractive, with shares trading at 9X FY3/26E EV/EBITDA, which it considers cheap both historically and compared to peers.
Goldman Sachs has lowered its earnings estimates for Sysmex, reducing operating profit forecasts by 2-8% for FY3/26E-FY3/30E, primarily due to forex assumption changes and a lower sales outlook for the China business, but still sees a 28% return potential compared to the sector average of 12%.
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