Numis cuts price target for IQE

Numis has cut its price target on IQE, after the tech firm issued its second profits warning this year.

The broker is targeting a share price of 50p, down from 80p, although it has retained its ‘buy’ on the AIM-listed firm, which supplies advanced compound semiconductor wafers.

On Thursday, IQE said that a drop in customer orders was expected to hit revenues, just weeks after it first warned of softer demand.

In a note published on Friday, Numis said: "IQE’s second warning since January snapped investor attention back to the here and now, and jarred their confidence in its strategic value.

"IQE’s near-term prospects are being hit by an industry-wide rather than a company-specific issue: value chains have not corrected over-stocking fast enough.

"Separately, although all big structural changes underpinning IQE’ strategic value are intact, current visibility of these is obscured by the effects of the weak macro backdrop.

"We have downgraded our forecasts to try and reflect how current industry conditions are impacting assessment of IQE’s NPV currently."

It reiterated its ‘buy’ rating, however, "albeit extra sensitively for now".

Shares in IQE, which tumbled on Thursday, were down 3% at 28.2p as at 0945 GMT.