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Investing.com - HSBC upgraded Visual Photonics Epitaxy Co Ltd (TPE:2455) from Hold to Buy, raising its price target to NT$193.00 from NT$99.00, citing strong optical and artificial intelligence demand expected in 2026.
The investment bank cut its 2025 earnings per share estimate by 18% due to unfavorable product mix in the second quarter of 2025 and foreign exchange impact. Despite this near-term adjustment, HSBC raised its 2026 earnings per share forecast by 14%.
HSBC noted its 2025 and 2026 earnings per share estimates are 12% below and 13% above consensus, respectively. The firm increased its target price-to-earnings multiple to 33x from 25x, basing this on the five-year forward average P/E ratio.
The higher multiple reflects HSBC’s projection of stronger earnings compound annual growth rate of 53% for 2025-2027, following an expected 12% year-over-year drop in 2025. The new price target implies approximately 31% upside potential.
HSBC rolled forward its forecast period from 2025 to 2026, stating it believes the second-quarter 2025 sales decline has been mostly priced into the stock already.
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