MIPS: Strong European Demand Will Drive Gains Despite U S Weakness

Narrative Update on Mips: Analyst Price Target Revised

Analysts have lowered their price target for Mips from SEK 580 to SEK 540, citing continued strength in Europe along with ongoing challenges in the U.S. following the company’s latest quarterly report.

Analyst Commentary

Bullish Takeaways

• Bullish analysts highlight robust momentum in European markets, indicating strong brand presence and execution in the region.
• The Buy rating is maintained because of confidence in Mips' long-term growth strategy and innovation pipeline.
• Positive signals from Q3 results reinforce the view that the company can deliver on its valuation, supported by resilient demand in its key segments.

Bearish Takeaways

• Bearish analysts express concern about persistent headwinds in the U.S., which continue to weigh on overall performance and growth potential.
• Recent reductions in earnings estimates reflect caution around near-term execution and the possibility of extended regional weakness.
• Valuation remains under pressure until improvements are evident in U.S. market trends and overall earnings trajectory.

Valuation Changes

• Fair Value remains unchanged at SEK 525, indicating stability in fundamental valuation assessments.
• The discount rate has risen slightly from 5.18% to 5.19%, reflecting a minor adjustment in risk assumptions.
• Revenue growth remains consistent at 27.2%, suggesting continued confidence in growth projections.
• Net profit margin remains unchanged at 42.7%, pointing to stable profitability expectations.
• The future P/E ratio has increased marginally from 34.11x to 34.12x, showing a minor uptick in projected earnings multiples.