On Tuesday, Denso Corp . (6902:JP) (OTC: DNZOY (OTC:DNZOY)) stock, a global automotive components manufacturer, received an upgrade in rating by investment firm CLSA. The firm raised the rating from Hold to Outperform, although they slightly lowered the price target to JPY2,600.00 from the previous JPY2,650.00.
CLSA cited "compelling valuations" as a key factor supporting the share price, with the potential for stock buybacks serving as an additional catalyst. The firm's analysis suggests that Denso's engagement in high-value-added products is likely to balance out weaker-than-anticipated demand for Japanese automobiles.
The firm anticipates that Denso's second-quarter operating profit could surpass market expectations due to increased contributions from the hybrid-vehicle (HV) demand. However, they project that the company's full-year performance might not meet the consensus.
In adjusting the price target, CLSA indicates a 21% upside potential for Denso's shares. The change in rating reflects a positive outlook based on the company's valuation. Alongside this update, CLSA also announced an analyst transition, with Leonard Bouhet taking over coverage from Christopher Richter.
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