UPDATE: Bank of America Upgrades Himax Technology; Raises PO

According to a research report published this morning, Bank of America has upgraded Himax Technology HIMX from Underperform to Buy, and raised PO from $1.29 to $3. In the report, Bank of America said, "We upgrade HIMX from Underperform to Buy and set our PO at US$3.00 (11.0x 2012 P/E) with our long-term fair value now US$3.70 (6% growth, 7% OPM, 10% WACC). Our market and company forecasts drive 2012/13E EPS up 73%/45% to US$0.27 and US$0.30. We prefer HIMX to Novatek (Underperform, NT$91.10) due to (1) valuation at 7.4x vs 14.0x P/E; (2) EPS growth of 350% vs 5%; and (3) growing leverage to smartphones (23% likely to increase to 40% by 1Q13)." Himax Technology is currently trading at $2.14.