Goldman Sachs: Raising Lenovo Group's (00992) target price to HK$51; steady growth in server demand outperforms peers

The Zhitong Finance App learned that Goldman Sachs released a research report stating that the forecast for Lenovo Group (00992) was drastically raised by 56%, 63% and 89%, while the revenue forecast for the 2027-2029 fiscal year was raised by 15%, 12% and 15% to reflect the increase in market share, product portfolio upgrades and AI overall solutions supporting the growth of AI servers, and the expected growth in the AI PC and storage business. The target price increased by 64.5% to HK$51, corresponding to the projected price-earnings ratio of 18.5 times for the 2027 fiscal year. Maintain a “buy” rating.

Lenovo's strong performance for the first fiscal quarter ended at the end of June this year confirmed the bank's positive views. Despite high memory costs, IDG's operating profit margin remained 7.1%, and revenue increased 27% year over year. It is expected that continued industry consolidation and product portfolio upgrades will drive its PC business growth ahead of its peers. The bank also expects Lenovo ISG's business revenue growth to remain strong, mainly due to steady demand for general-purpose servers, product portfolio upgrades, and the expansion of the AI server customer base.