Advantech Co Ltd
2395: XTAI (TWN)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
TWD 174.00 | Fggtd | Tgdjkwgrv |
Advantech Earnings: Shares Overvalued on Soft Guidance and Potential Pitfalls in Recovery
We maintain our fair value estimate of TWD 290 for narrow-moat Advantech as we see a recovery in bookings and more intense competition being priced in. We see Advantech benefiting from demand for automated industrial, energy, retail, and medical systems, but the stock appears to be overvalued as artificial intelligence is unlikely to accelerate earnings growth structurally. We also believe customers in the above four sectors are more cautious in adopting AI since the potential damage that can be caused by system failures is more acute.