On Monday, Deutsche Bank adjusted its outlook on Nordic Semiconductor ASA (OL:NOD:NO) shares, reducing the price target to NOK115 from NOK130, while keeping a Hold rating on the stock. The adjustment followed the company's Capital Markets Day (CMD), where expectations for a new strategic direction from the new CEO were left unmet.
The bank's analyst noted disappointment, particularly with the progress of the nRF54 series and the company's approach to its loss-making cellular operations. Nordic Semiconductor had indicated that the nRF54 series is likely to be a significant contributor to its financial performance only by 2026, with a modest impact expected in 2025. As a result, the anticipated sales growth for 2025 could be revised downward to below 17%, a stark drop from the previous 32% forecast, which may lead to the elimination of net profits.
During the CMD, it was also suggested that the company's high-end product, the 'H series', might not achieve the 'premium-ization' effect initially expected. The indication was that customers consider the H series to be over-specified, which could prompt a shift in volume towards the lower-end 'L series' products, priced closer to the traditional $1 level.
The analyst expressed concern that this shift could increase competition for Nordic Semiconductor, particularly from companies like Silicon Labs and Chinese manufacturers such as Espressif and Telink. The Hold rating reflects a cautious stance on the company's stock amidst these developments.
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