In a report published today, BofA Merrill Lynch downgraded the shares of Himax Technologies (HIMX) to Underperform from Buy and lowered the price target to $12.50 from $17.58.

“We lower our 2014/15 EPS (ADR) by 22.7%/17.6% to US$0.60/US$0.89 from US$0.77/US$1.08 on weaker LCoS and margin projections. We lower our 2014 sales forecast from up 42.3% to 27.9% but raise 2015E from 30.0% to 32.5%. Our lowered LCoS impacts our OPM which we’ve taken down 2ppt to 11.8%. That still reflects a healthy recovery from 9.6% in 2013 and 9.1% in 2012.” BofA Merrill Lynch said

“The company is competing in a number of highly competitive markets so sharp margin expansion will be difficult without a sharp ramp in LCoS. Mgmt is likely to move forward with capacity expansion but may not be able to fill that capacity until 2015. Hence, 2015 OPM should rise another 2ppt YoY to 13.8%.” it added

Shares of Himax Technologies (HIMX) closed at $13.38 on Monday

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