Overview#
J.P. Morgan has recently started coverage of Comet Holding, a Swiss company that supplies semiconductor sub-systems, rating it as 'overweight.' This rating suggests that they believe the stock will perform better than the market average. The bank has set a price target of CHF335 for December 2027, indicating a potential increase of 35.2% from its recent closing price of CHF247.80.
Growth Projections#
The brokerage expects Comet's revenue to grow significantly, forecasting an increase from CHF457 million in 2025 to CHF738 million by 2028. They also anticipate that the company's adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margins will rise from 10.1% to 25% during this period. Adjusted EPS (Earnings Per Share) estimates for 2027 and 2028 are projected at CHF11.92 and CHF17.01, respectively, which are higher than the average estimates from Bloomberg.
Key Product Insights#
A major factor in J.P. Morgan's positive outlook is Comet's Synertia RF power generator, launched in July 2022. The firm estimates that this product will capture about 8.5% of a projected $1.7 billion market by 2028, contributing around CHF111 million in revenue. Currently, Comet holds a 2% market share, while the leading competitor, Advanced Energy, has a 40% share.
Financial Considerations and Risks#
J.P. Morgan has valued Comet using a sum-of-the-parts approach, applying different multiples to various segments of the business. They project that the company will face negative free cash flow of CHF13 million in 2026 due to significant capital expenditures for a new manufacturing facility in Malaysia, but expect recovery in the following years. Potential risks include slower adoption of RF generators, competitive pressures from China, and currency fluctuations between the USD and CHF. Since January 2025, Comet's shares have significantly lagged behind the European Semiconductors and SemiCap Index by 67 percentage points.