Himax Technologies (HIMX) is seeing near-term support from automotive inventory restocking, though broader demand visibility into the second half of 2026 remains limited, Morgan Stanley said in a Monday note.
The researchers said management views Q1 as the cycle trough, with recovery expected in Q2 across automotive display ICs and select consumer segments, supported by improving order momentum and pricing actions implemented from April.
The analysts cautioned that macro uncertainty, cost inflation, and uneven demand across automotive and consumer electronics could weigh on margins, noting that while pricing actions are underway, a sustained end-demand recovery has yet to materialize.
The company guided Q2 revenue growth of 10% to 13% quarter-on-quarter, alongside gross margins of around 32%, reflecting expected sequential improvement driven by new project ramps and recovery in key display driver IC segments, the report added.
Morgan Stanley maintained its equal weight rating on the stock and raised its price target to $17.40 from $8.
Shares of Himax Technologies were up more than 18% in Monday trading.
Price: $21.03, Change: $+3.24, Percent Change: +18.21%