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BofAS Raises LENOVO GROUP (00992.HK) TP to HKD26.5; Share Price Has Reflected Server Turnaround
2026-06-22 13:41:45 BofAS published a report stating that, driven by strong server profit margin expansion, it significantly raised its earnings forecasts for LENOVO GROUP (00992.HK) for fiscal years 2027 to 2028 (each ending March) by 70% to 82%, and introduced a forecast for fiscal year 2029. As the resilient server business has turned from loss to profit, the broker substantially increased its TP for LENOVO GROUP from HKD9.9 to HKD26.5, corresponding to a forecast FY2027 PE of 16x. However, the broker believes the current valuation is reasonable and reiterated its Neutral rating. The broker noted that LENOVO GROUP癒礎s Infrastructure Solutions Group (ISG) has achieved profitability, with operating margin reaching a record 3.6%. Benefiting from growing demand for CPU servers and storage, as well as a higher contribution from AI servers, the current profit recovery cycle is more sustainable than previous cycles. However, compared with leading players in the ODM industry, Lenovo remains smaller in scale. In addition, its Intelligent Devices Group (IDG), which serves as the pillar of cash flow, continues to face margin concerns. A prolonged upcycle in memory prices may put pressure on end-market demand and margins over the long term. (su/da)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |