Needham Thinks MagnaChip’s Stock is Going to Recover


In a report released today, Rajvindra Gill from Needham maintained a Buy rating on MagnaChip (MX), with a price target of $10. The company’s shares closed yesterday at $6.24, close to its 52-week low of $5.94.

Gill said:

“In conjunction with our industry report titled, ” China, China China”, we are reducing our estimates and PT ahead of earnings to reflect China handset weakness, especially at the high-end, and lower foundry sales. MX’s total revenue came from Greater China, making it vulnerable to softness in China, specifically amongst its Chinese foundry customers. While we remain positive on OLED penetration, we are lowering our underlying base of handset units. On the positive side, we the Power and Display segments will show growth, driven by new product cycles (advent of foldable phones), and increasing demand for premium Power products, especially in the rapidly growing market for electric vehicles.”

According to TipRanks.com, Gill is a 5-star analyst with an average return of 10.8% and a 51.8% success rate. Gill covers the Consumer Goods sector, focusing on stocks such as Everspin Technologies Inc, Smart Global Holdings Inc, and Adesto Technologies Corp.

The word on The Street in general, suggests a Moderate Buy analyst consensus rating for MagnaChip with a $10 average price target.

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Based on MagnaChip’s latest earnings release for the quarter ending September 30, the company reported a quarterly net profit of $17.22 million. In comparison, last year the company had a net profit of $43.65 million.

Based on the recent corporate insider activity of 34 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of MX in relation to earlier this year.

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MagnaChip Semiconductor Corp. engages in the design and manufacture of analog and mixed-signal semiconductor products. It operates through the Foundry Services Group and Standard Products Group segments.

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