PETALING JAYA: Analysts expect Inari Amertron Bhd
’s near-term outlook to remain soft following weaker earnings performance in its third quarter due to weakness in the radio frequency (RF) segment, though recovery may be in store in the next financial year.
Inari’s results for the quarter ended March 31, 2026 (3Q26) narrowly missed expectations, with a core net profit of RM32mil, a decline of 45% year-on-year (y-o-y), Hong Leong Investment Bank (HLIB) Research said.
This brought year-to-date earnings to RM148mil, coming in at 74% of HLIB Research’s full-year forecasts and 72% of consensus. Revenue fell by 14% y-o-y due to lower RF volume.
HLIB Research said the shortfall was mainly driven by foreign-exchange headwinds compressing margins, but predicts a meaningful recovery in the financial year 2027 (FY27).
“The RF overhang on Inari has run its course and we believe a clearer set of catalysts is coming into focus,” it said.
“Sentiment is poised to improve on the back of RF content gains and a datacom photonics ramp in the lead up to the upcoming smartphone cycle from the second half of FY26.”
HLIB Research trimmed its FY26 earnings per share (EPS) forecasts by 7%, reflecting weaker margins, but made no changes to FY27 to FY28 EPS.
It maintained its “buy” rating on the stock with a target price of RM2.20.
Apex Securities Research, meanwhile, highlighted that Inari’s gross profit margins compressed sharply to 15.7% from 23% in the preceding quarter, its lowest level in at least two years.
The research house said the company’s near-term prospects remain challenging, compounded by the fire at its Philippines plant CK1 in May which shut down the facility.
Apex Securities Research downgraded its recommendation on the stock from a “hold” to a “sell”, holding the view that its recent share price run-up to RM1.98 is unjustified against the current earnings backdrop. It maintained its target price at RM1.41.
TA Research similarly downgraded its call on Inari from a “buy” to a “hold”, citing limited upside following the share price rally. It cut its FY25, FY26 and FY27 forecast by 12.1%, 5.4% and 1.9%, respectively, to take into account lower loadings from the RF segment.
However, it raised its target price from RM1.83 to RM2.07, after restoring its target price-to-earnings multiple from 26 times to 28 times.
