Himax Now Worth $11/Share As Business Trends Improve, Northland Capital Says

In a report published Wednesday, Northland Capital Markets analyst Tom Sepenzis maintained an Outperform rating on

, while raising the price target from $9 to $11. Himax is expected to benefit from improving business trends across all segments and perform better in CY16. "We believe Himax is experiencing better than expected results in its large panel business driven by new customer wins and increased content gains given the growth in ultra-high definition televisions. This should lead to better ASP's and potentially stronger margins in the near to intermediate term," analyst Tom Sepenzis mentioned. Himax's performance this year was hit as Samsung switched to AMOLED panels for a number of its new devices. A recent pickup in unit sales by several other customers has, however, been witnessed in recent months. "Looking ahead, we believe that Himax will get qualified at Samsung for AMOLED drivers in time for next year's crop of phones, and this could lead to renewed strength in both top line and bottom line results as AMOLED panels carry higher ASP's and margins," Sepenzis added. The EPS estimates for 2Q15, FY15 and FY16 have been revised from $0.05 to $0.06, from $0.33 to $0.32 and from $0.44 to $0.49, respectively, to reflect the improved tone of business in the June quarter and the potential impact of several new products.