BE Semiconductor: Equity story fading out in the short-term (NEUTRAL vs. BUY, Fair Value EUR28.5 vs. EUR37.9 (+41%))
BE Semiconductor: (NEUTRAL vs. BUY, Fair Value EUR28.5 vs. EUR37.9 (+41%))Equity story fading out in the short-term
Yesterday, Besi reported Q3 guidance well below the consensus (-27.5% seq. at mid-range vs. -4%). This is mainly due to decreasing spending from mobile and computing applications. Following the new guidance and management’s comments, we believe the story is clear now for H2 with less catalysts for the stock in the short term. As TSMC delayed capex from 2018 to 2019, we believe Besi should claw back a part of the revenue shortage next year and should be able to mitigate the anticipated market cyclical downturn, however the timing remains uncertain. We decrease our FV from EUR37.9 to EUR28.5 and change our recommendation from Buy to Neutral.
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