Lite-On Technology Downgraded to Neutral by BofA Securities, Price Target Lowered

On Friday, BofA Securities revised its outlook on Lite-On Technology Corp (2301),

downgrading the stock from a "Buy" rating to "Neutral" and lowering the price target from TWD125.00 to TWD110.00. This adjustment reflects concerns over Lite-On’s slower market performance, especially as the company is perceived to be entering certain sectors later than its competitors. Despite the downgrade, BofA recognized Lite-On’s strong presence in the server power-supply market, particularly with improved margins driven by an optimized product mix.

Along with this rating change, BofA has adjusted its earnings per share (EPS) projections for Lite-On from 2024 to 2026, reducing estimates by 3% annually. The new price target of TWD110 is based on a 16x P/E ratio for projected 2025 earnings, compared to the previous target which was based on an 18x multiple, reflecting a shift toward more cautious growth expectations.

This revision brings Lite-On’s valuation closer to its historical average, with the stock now trading at 15x its estimated 2025 P/E, roughly in line with the industry average of 16x for Taiwanese tech companies. Although the stock has been downgraded, BofA Securities still views Lite-On as a key player in the AI server power-supply market, ranking second only to Delta in this field.