On Monday, Deutsche Bank has adjusted its price target for Comet Holding AG (COTN:SW), a Swiss technology firm, reducing it to CHF400 from the previous CHF450. Despite the decrease in the price target, the firm continues to endorse a Buy rating for the company's shares.
The adjustment comes as the analyst anticipates a slower recovery in orders, particularly due to subdued demand in the memory wafer fabrication equipment (WFE) sector, notably within NAND memory. Comet Holding, which counts Lam Research (NASDAQ:LRCX) as its major client, is expected to be affected by these market conditions as well as foreign exchange (FX) influences.
The revised forecast now positions the expected fiscal year 2024 sales at 13% below the company's guided range of CHF440-480 million. This estimate still suggests a half-on-half growth of 10%, which, while positive, falls short of the more optimistic growth previously anticipated.
For the third quarter, the analysis now projects that order volumes will remain flat quarter-on-quarter, following a significant increase of 36% in the second quarter. The projected impact on profitability includes a lower forecast for EBITDA margins in 2024, now expected to be at 13.2%, which is beneath the previously guided range of 15-17%. Additionally, the forecast for 2024 EBIT has been reduced by 28%.
Despite these revisions, the firm's stance on Comet Holding remains positive with a Buy recommendation.
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