JPMorgan downgrades Supermicro to Underweight on uncertainty after update - InvestingChannel

JPMorgan downgrades Supermicro to Underweight on uncertainty after update

JPMorgan analyst Samik Chatterjee downgraded Supermicro to Underweight from Neutral with a price target of $23, down from $50. The company last night issued a positive update relation to the opinion of the Special Committee, but JPMorgan expects more uncertainty around both the company’s regulatory filings and business fundamentals, the analyst tells investors in a research note. The firm says Supermicro refrained from providing further transparency around the issues leading to the disagreement with the prior auditor even as it reaffirmed the Special Committee opinion that the Audit committee had acted independently and that there is no evidence of fraud or misconduct. The company also offered limited commitments on leadership changes to address investor concerns and a lack of certainty around the timing of an appointment of a new auditor, adds JPMorgan. The firm reduced revenue growth expectations and believes the stock’s discount to server companies is justified give its greater uncertainty in the financials in the medium-term.

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