On Wednesday, Nordic Semiconductor ASA (OL:NOD:NO) experienced a shift in its stock outlook as Jefferies adjusted its rating and price target for the company. The firm downgraded the semiconductor manufacturer from a "Buy" to a "Hold" status, while also significantly reducing the price target from NOK 195.00 to NOK 88.00.
The adjustment by Jefferies reflects a response to Nordic Semiconductor's first-quarter sales guidance for 2024. The guidance was interpreted as an indication of the market's current state, with under-shipping to end demand, rather than pointing to any inherent structural issues within the company itself.
"We credit Nordic's extended downcycle to customer mix and deeper shortages vs peers," said Jefferies.
Despite these challenges, Jefferies anticipates a potential rebound in the Internet of Things (IoT) sector during the second half of the year. Nevertheless, the firm has adopted a cautious stance, preferring to maintain a neutral position on Nordic Semiconductor's stock until there is more clarity regarding the timing of the market's recovery.
The revised price target of NOK 88 by Jefferies takes into account the firm's new estimates for Nordic Semiconductor. This new valuation benchmarks the anticipated performance and potential risks associated with the company's operations in the current market environment.
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