J.P. Morgan: ams-Osram
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J.P. Morgan maintains its Overweight rating on ams-Osram, raising the December 2027 target price from CHF 23.60 to CHF 24.40 based on a revised 12.5x multiple on 2028 EBIT, down from 13.0x. The investment thesis is gaining traction, with expected Q2 results likely to confirm continued core business growth and balance sheet improvements, the latter supporting more favorable refinancing terms.
The firm raised its 2026–2028 revenue forecasts by 1–3% and adjusted EBITDA projections by 3–12%. Adjusted earnings per share improved significantly due to lower interest expenses, following the completed refinancing of 2029 USD bonds. Across core markets, automotive saw roughly 2% organic growth in Q1, consumer electronics benefits from a 3–4% upward revision in iPhone consensus shipments, and industrial revenue grew 11%, driven by horticultural lighting.
Emerging growth catalysts add further conviction. For smart glasses, market adoption is expanding from an estimated 15 million units annually in 2025, with increasing content value via Micro-LED engines. Micro-LED interconnects present an additional opportunity, with market potential cited as at least double the active cable market, though a launch is not anticipated until Credo's FY28.
However, the pathway to achieving over 25% adjusted EBITDA margins by 2030 remains unclear. J.P. Morgan estimates a 19.7% margin for 2028, compared to the 20.1% consensus. Margin expansion relies on approximately EUR 200 million in gross savings from the Simplify program, volume leverage, and product mix improvements.