Fri Sep 20 12:40:35 UTC 2024: ## BofA Securities Downgrades Lite-On Technology to Neutral, citing Cooling Business Concerns

**Taipei, Taiwan** – BofA Securities has downgraded its rating on Lite-On Technology Corp (2301:TT) from Buy to Neutral, citing concerns about the company’s late entry into the cooling market. The investment bank also reduced its price target to TWD110.00 from TWD125.00.

Despite the downgrade, BofA acknowledges Lite-On’s strong position in the server power-supply sector, particularly in the AI server space where it is ranked among the top 2 players alongside Delta. The firm also highlights the company’s improving profit margins driven by optimized product mix.

However, the firm has lowered its EPS estimates for Lite-On Technology by 3% each year from 2024 to 2026 due to concerns about its cooling business. The revised price target of TWD110.00 is based on a P/E multiple of 16 times the projected 2025 EPS, a shift from the previous valuation of 18 times the forecasted EPS between Q4 2024 and Q3 2025.

While Lite-On has been downgraded, BofA remains optimistic about the company’s overall performance and does not recommend an Underperform/Underweight rating. The firm believes Lite-On is currently valued fairly, with its stock trading at 15 times the estimated 2025 P/E, aligning with the average P/E of 16 times for its Taiwanese industry peers.

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