HTC Falls as Top-Ranked Analyst Sees Continued Nightmare
The top-ranked analyst covering HTC Corp. is predicting the company’s “nightmare” is poised to get even worse after the smartphone maker slashed its sales forecast, triggering the stock’s biggest two-day drop in three years.
Sinopac Financial Holdings Co. analyst Calvin Huang in February suggested investors take profit on the stock amid poor reviews of the M9 smartphone that was yet to be introduced at the time. Shares of HTC fell their daily limit on the two trading days since the Taoyuan, Taiwan-based company cut its sales projection as much as 35 percent and announced a writedown that makes turning a profit this year almost impossible.
“The nightmare isn’t over,” Huang wrote Monday, cutting his price target to NT$53, indicating the stock could fall 37 percent more from Monday’s close. “HTC will keep losing share in the smartphone market and will keep losing money in the coming quarters.”
Slower demand for high-end smartphones and weaker sales in China prompted HTC’s June 5 warning and spurred Credit Suisse Group AG, Fubon Financial Holding Co. and BNP Paribas SA to cut their ratings on the stock. Once the only company to produce Android-based phones, HTC is now being squeezed by larger competitors Samsung Electronics Co. and Apple Inc., and cheaper prices offered by China’s Lenovo Group Ltd. and Xiaomi Corp.