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Morgan Stanley has upgraded VAT Group to "neutral" from "underweight," citing early signs of improvement in the Memory segment's pricing environment. While the company faces ongoing challenges, including uncertainty in global foundry demand, recent stabilization in DRAM pricing has prompted this reassessment. Despite a projected revenue growth of nearly 20% for 2025, analysts remain cautious about VAT's ability to sustain higher growth rates beyond the near term.
The Swiss stock market closed positively on Friday, with the SMI ending at 13,004.48 points, up 0.36%. Holcim led gains with a 3.0% rise after announcing a dividend increase, while Logitech fell 4.7% following a downgrade by Bank of America. Key earnings reports are expected next week from Lindt&Sprüngli and Kühne+Nagel.
UBS has lowered its price target for VAT Group AG to CHF350 from CHF370, maintaining a Neutral stance due to a lack of near-term recovery in semiconductor capital expenditures. The firm notes flat or declining memory chip prices and anticipates no significant profit improvement in H1 2025, with a potential market recovery not expected before summer 2025. This cautious outlook reflects broader challenges in the semiconductor industry, impacting VAT Group's financial performance.
UBS has lowered its price target for VAT Group AG to CHF350 from CHF370, maintaining a Neutral stance due to a lack of evidence for a near-term recovery in semiconductor capital expenditures. The firm anticipates no significant profit improvement in H1 2025 compared to Q4 2024, with a potential market recovery not expected before summer 2025. This cautious outlook reflects ongoing challenges in the semiconductor industry, which is critical for VAT Group's products.
European stocks rebounded, led by technology shares, as concerns eased over US semiconductor sales restrictions to China. However, political turmoil in France caused its stocks and bonds to underperform, with yields on French bonds nearing those of Greece for the first time. Meanwhile, the Brazilian real hit a record low amid disappointing government spending cuts, and US equity futures rose slightly ahead of the Thanksgiving holiday.
The SMI closed lower, with Sika experiencing a significant decline and oil prices rising. VAT shares, after a strong performance last year, have struggled due to disappointing half-year results and economic concerns, returning to early-year levels. Experts suggest that a recovery in the semiconductor market is still distant, with potential opportunities in AI, but no immediate upward movement is anticipated.
VAT Group AG
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Morgan Stanley upgrades VAT Group to neutral amid memory market recovery
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