Raspberry Pi Santa rally 'overdone', says HSBC
Raspberry Pi tumbled on Tuesday after HSBC downgraded the shares to 'reduce' from 'buy' on valuation grounds, arguing that the Santa rally was overdone.
HSBC said Raspberry Pi has made solid progress since its IPO, showing both commercial and technology progress with its channel strategy, improving the supply chain position, traction with custom products and new product launches in 2024.
"The festive mood lifted Raspberry Pi shares last month as they outperformed not only the FTSE 250 but also all the global wider semiconductor names substantially," it said.
"We struggle to see catalysts that could drive the share price meaningfully higher in the near term," it said.
"While we like the long-term story for Raspberry Pi we think the Goldilocks scenario is asking too much."
The bank lifted its price target on the stock to 500p from 440p to reflect updated FX assumptions and a lower weighted average cost of capital. "But we believe there is too much baked into the current share price," it said.
HSBC said the new target price implies 23.5% downside.
At 1000 GMT, the shares were down 8.2% at 558p.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.