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Investing.com - Morgan Stanley (NYSE:MS) upgraded Sunny Optical Technology Group Co Ltd (HK:2382) (OTC:SNPTF) from Equalweight to Overweight on Thursday, raising its price target to HK$90.00 from HK$70.00. The upgrade aligns with the company’s strong fundamentals, reflected in its perfect Piotroski Score of 9 and "GREAT" financial health rating according to InvestingPro analysis.
The upgrade comes after a challenging period for the Chinese optical component manufacturer, which saw its revenue stagnate at Rmb38 billion between 2020 and 2024. The company experienced declining revenue from Rmb38 billion in 2020 to Rmb32 billion in 2023, before recovering to Rmb38 billion in 2024. Recent data shows impressive revenue growth of 20.87% in the last twelve months.
Morgan Stanley had previously downgraded Sunny Optical to Equalweight on March 30, 2025, citing that positive factors were already reflected in the stock price and valuation was unattractive at that time.
The stock has underperformed since early 2025 amid weaker shipment data and trade tariff disputes in recent months, according to Morgan Stanley’s analysis.
Sunny Optical’s price-to-earnings multiple contracted from above 40x in 2021-2022 to approximately 27.9x currently, reflecting the market’s response to the company’s growth challenges over the past several years. With a PEG ratio of just 0.18, InvestingPro analysis suggests the stock is currently undervalued, with 8 additional key insights available to subscribers.
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