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Investing.com - JPMorgan has initiated coverage on Taiyo Yuden Co Ltd (TYO:6976) (OTC:TYOYY) with a Neutral rating and a price target of JPY2,500.00 through December 2026.
The Japanese electronic components manufacturer has experienced a significant share price decline from its COVID-19 pandemic peak due to prolonged post-pandemic inventory adjustments, according to JPMorgan.
Rising fixed costs from ongoing MLCC (multilayer ceramic capacitor) production capacity expansion and widening losses in communications devices have also contributed to the company’s challenges.
JPMorgan notes that a modest recovery appears to be underway from mid-FY2024, primarily in MLCCs for AI servers and PCs, but believes an end to the long-running inventory correction in automotive MLCCs will be necessary for further fundamental improvement.
The investment bank assigned the Neutral rating because it considers Taiyo Yuden’s current valuations unattractive despite the early signs of recovery in certain segments.
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