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Investing.com - CLSA downgraded Mitsubishi Electric (TYO:6503) (OTC:MIELY) from Outperform to Hold on Monday, while simultaneously raising its price target to JPY3,650.00 from JPY3,100.00.
The rating change follows a significant 26% increase in Mitsubishi Electric’s share price over the past three months, which has reduced the potential upside despite CLSA’s more optimistic price target.
CLSA analyst Morten Paulsen noted that the firm has "long argued that consensus forecasts for Mitsubishi Electric were too low and that its product portfolio should trade on higher multiples."
The research firm maintains that consensus forecasts remain too low for the Japanese electronics and electrical equipment manufacturer, but points out that valuation multiples have already expanded considerably.
CLSA explained its decision to downgrade despite the higher price target, stating it was "struggling to get sufficient upside to maintain an O-PF rating on a 12-month basis."
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