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Investing.com -- UBS downgraded Nordic Semiconductor ASA (OL:NOD) to “sell” from “neutral,” citing risks to 2026 performance despite strong 2025 growth.
Shares of the Norwegian company were down 2.1% at 08:03 ET (12:03 GMT).
The downgrade comes after the company’s stock rose 60% year to date, supported by a rebound from the downcycle and expected revenue growth of more than 20% in 2025.
UBS said the market is pricing in about 20% growth over the next three years, in line with consensus and company guidance, but warned that cyclical and customer-specific tailwinds will fade in 2026.
UBS projected its 2026 revenue estimate about 8% below consensus, forecasting growth to normalize at 9% compared with consensus at 19%.
The brokerage cited three main risks: reduced demand from major customers Logitech, Apple and Dexcom, limited growth potential from the new nRF54 series due to product cannibalization and niche use cases, and challenges in achieving the company’s target of more than 25% EBITDA margin by 2028. UBS forecast Nordic will reach only 22% by then, reflecting lower growth expectations.
Following second-quarter results, UBS raised its 2025 earnings-per-share estimate by 41% to $0.17 but left forecasts for 2026 largely unchanged at $0.27, in line with consensus.
For 2027, UBS projected EPS of $0.42, about 1% below consensus. The bank increased its price target to NKr121 from NKr115, but with Nordic shares trading at NKr165.90 as of Aug. 29, UBS said the valuation was “out of range” given the likely growth slowdown. The new target implies a 27% downside from current levels.