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Investing.com - HSBC downgraded ASUSTeK Computer Inc (TPE:2357) (OTC:AKCPF) from Buy to Hold on Wednesday, while reducing its price target to NT$680.00 from NT$830.00.
The downgrade reflects HSBC’s revised outlook for ASUSTeK’s operating margins, prompting the firm to cut its 2025 and 2026 earnings per share forecasts by 2% and 11% respectively. HSBC’s operating profit forecasts now stand 13% below consensus for 2025 and 1% below for 2026.
HSBC noted a significant slowdown in ASUSTeK’s expected operating profit growth, projecting a compound annual growth rate of 12% for 2025-2027, compared to the robust 105% growth achieved over the past two years.
The reduced price target incorporates a lower target PE multiple of 12x, down from 13x previously, applied to HSBC’s 2026 estimated EPS of TWD56.61, which was revised downward from TWD63.85.
HSBC explained its Hold rating reflects expectations for a slow margin recovery at ASUSTeK, with the firm waiting for the company’s profitability to stabilize before reconsidering its investment stance.
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