On Friday, Citi issued a Buy rating on shares of Socionext Inc (6526:JP) and set a price target of ¥3,900.00. The semiconductor company, which specializes in systems on chips (SoCs), has undergone business reforms since its inception in 2015 that have led to increased sales and improved profit margins.
The launch comes as Socionext shares have seen a decline and consensus estimates have declined. Citi’s analysis shows that the market has taken into account the potential for apartment sales in the fiscal years ending in March 2025 and 2026. This forecast is explained by the loss of one-off demand and the termination of several projects.
Despite near-term expectations of stagnant sales, Citi expects market attention to shift toward Socionext’s potential for renewed growth beginning in the fiscal year ending March 2027. The company’s positive sentiment on the company’s prospects is reflected in its Buy rating.
Citi’s position on Socionext is based on the company’s successful business reforms and future growth expectations. The price target of ¥3,900.00 reflects Citi’s confidence in the company’s value and trajectory in the coming years.
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