Fri Sep 20 07:47:20 UTC 2024: ## Morgan Stanley Downgrades VAT Group AG to Underweight, Citing Memory Sector Weakness

**Zurich, Switzerland** – Morgan Stanley has downgraded its rating on VAT Group AG (VACN:SW) from Equalweight to Underweight, citing a deteriorating outlook for the memory sector. The investment bank also reduced its price target for the stock to CHF350 from CHF460.

This downgrade follows a recent reassessment of the memory sector’s performance and capital expenditure (capex) projections. Earlier this year, Morgan Stanley had been bullish on VAT Group, citing strong demand and a recovery in the memory sector. However, the recent shift in the global memory market has led to a more cautious outlook.

Morgan Stanley’s global team recently revised its perspective on the memory sector, noting a deteriorating pricing environment and a delay in NAND capital expenditures, which are now expected to extend well into 2024. This is attributed to a lack of a cyclical recovery in areas outside of Artificial Intelligence (AI).

Despite these setbacks, the analyst acknowledged some positive aspects for VAT Group, such as its exposure to the Chinese market and the ongoing build-out of Gate-All-Around (GAA) technology. However, these factors were not sufficient to offset the negative impact of the weakened memory sector outlook.

The revised price target of CHF350 reflects the new expectations and the downgrade to Underweight signifies a more cautious view of the company’s stock by Morgan Stanley. The analyst’s statement provided a detailed rationale for the changes in the investment firm’s outlook on VAT Group.

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