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Investing.com - Morgan Stanley upgraded Tri Chemical Laboratories Inc (4369:JP) from Equalweight to Overweight on Friday, while lowering its price target to JPY3,500.00 from JPY3,800.00.
The upgrade comes primarily in response to the recent sell-off in Tri Chemical Laboratories stock, which Morgan Stanley believes has created a more appealing valuation despite trimmed forecasts.
The research firm revised its demand outlook for High-k materials, leading to the reduction in price target, but maintained its F1/27e P/E target of 18x, which represents a premium compared to the 13x average for semiconductor material-related stocks.
Morgan Stanley cited Tri Chemical’s current monopoly in supplies of PF3, a super-low-temperature etching material expected to see expanded use, as a key factor supporting the premium valuation.
The firm also highlighted Tri Chemical’s rapid growth in logic materials sales, which reached JPY3.5 billion in F1/24, JPY5.2 billion in F1/25, and are expected to reach JPY7.8 billion in F1/26.
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