Bank of America: significantly raises Lenovo Group's target price to 26.5 Hong Kong dollars, and increases profit forecast.

Bank of America Securities released a report stating that due to strong server profit expansion, Lenovo Group's profit forecast for the fiscal years 2027 to 2028 will be significantly raised by 70% to 82%, and introduced forecasts for fiscal year 2029. The bank raised Lenovo Group's target price from HK$9.9 to HK$26.5, corresponding to a forecast P/E ratio of 16 times for the fiscal year 2027, reiterating a "Neutral" rating and believing that the current valuation is reasonable. The bank pointed out that Lenovo Group's Infrastructure Solutions Group has achieved profitability, with operating profit margin reaching a record 3.6%. Thanks to the growth in demand for CPU servers and storage, as well as the increase in the proportion of AI servers, this round of profit recovery is more sustainable than in previous cycles.