JPMorgan initiates Lotes stock with Overweight rating on server growth potential

Published 17/09/2025, 06:48
JPMorgan initiates Lotes stock with Overweight rating on server growth potential

Investing.com - JPMorgan has initiated coverage on Lotes Co Ltd (TPE:3533) with an Overweight rating and a price target of NT$1,900.00.

The Taiwan-based connector manufacturer’s shares have underperformed the TAIEX by approximately 30% year-to-date, trading at 17.5x 12-month forward earnings per share, according to JPMorgan.

The investment bank expects Lotes to benefit from industry tailwinds including server CPU socket upgrades and market share gains in the PCIe market, with server revenue projected to reach 43% of total revenue by 2027.

JPMorgan forecasts a 33% earnings compound annual growth rate for Lotes over 2025-27, with potential additional earnings of NT$3-4 per share from possible GPU socket business opportunities.

The firm identified key downside risks including potential delays in new CPU launches, weakened demand for general servers, and the emergence of new server CPU socket competitors.

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