Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Investing.com - Morgan Stanley has upgraded Alps Alpine Co Ltd. (6770:JP) (OTC:APELF) from Underweight to Equalweight and raised its price target to JPY1,950.00 from JPY1,250.00.
The upgrade follows Morgan Stanley’s increased earnings forecasts for the company, with operating profit projections rising to JPY29.1 billion for fiscal year ending March 2026, up from its previous estimate of JPY17.4 billion. The new forecast exceeds both the company’s guidance of JPY25.0 billion and the FactSet consensus of JPY24.3 billion.
Alps Alpine, which supplies camera actuators for North American smartphones, is expected to gain market share after a competitor with production in the Philippines faced obstacles sourcing rare earth magnets during the first and part of the second quarter. Alps Alpine’s production facilities in Japan and China reportedly avoided similar issues.
The firm anticipates additional earnings contributions from switches, encoders, and haptic devices for gaming applications in the components segment for the fiscal year ending March 2026.
Morgan Stanley noted challenges facing the company, including earnings volatility based on customer development cost recovery and increasing capitalized R&D expenses, which rose from JPY4 billion in fiscal 2024 to JPY7 billion in fiscal 2025, with guidance for JPY13.5 billion in fiscal 2026.
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