Goldman Sachs analyst Bruce Lu upgraded MediaTek (MDTKF) to Buy from Sell with a price target of NT$770, up from NT$605. The firm believes MediaTek has reached an inflection point in Q3 with the global smartphone market and expects its revenue to resume growth momentum in the next 12-18 months. In MediaTek’s Q2 analyst meeting on 28 July, management stated that overall channel inventory is now close to a healthy level, and expects its mobile business growth to continue into Q3. Furthermore, the key factors underlying Goldman’s prior Sell rating on MediaTek, including slower-than-expected smartphone demand recovery, severe pricing competition, and share loss within Samsung (SSNLF), have now stabilized with a better-than-expected margin outlook, the firm says.
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