Nomura Securities: Upgrading Lenovo (00992) Rating to “Buy” Target Price of HK$14

Zhitong Finance learned that recently, the well-known bank Nomura Securities released a research report stating that it will raise the rating of Lenovo (00992) to buy (Buy) and raise the target price to HK$14. Compared with the current stock price, there is still 38% room for an increase of 38%.

Nomura Securities pointed out in the research report that the reason for the upward rating is that Lenovo's stock price has been fluctuating for the past six months, which is a good time to buy; in addition, Nvidia H20 servers may resume shipping to Chinese customers, RTX Pro will be launched in China at the end of fiscal year 2026, and Lenovo is expected to gain more AI server business in China, which is also supported by strong demand for general-purpose servers from international customers and growing PC market share. Based on a 12x price-earnings ratio of $0.15 per share for FY2026 (previously based on a 12x price-earnings ratio of $0.14 per share for FY2026). The stock currently trades at a price-earnings ratio of 8.6 times the projected earnings per share for fiscal year 2026.

Nomura also believes that thanks to strong demand for general-purpose servers and increased PC market share, the April-June results may exceed expectations. This is mainly due to the shift in capital expenditure from artificial intelligence servers to general-purpose servers for some leading customers (including international hyperscale enterprises and Chinese Internet companies), driving the increase in server revenue. In the PC business, Lenovo has taken more market share in the US and the EU from peers such as Dell and HP, which will help the overall sales and profit momentum in April-June.

Looking ahead to 2026, Nomura believes Lenovo is expected to be one of the beneficiaries in view of Microsoft's rising demand in recent quarters. The resumption of H20 server shipments is expected to generate additional revenue in the December quarter. On the other hand, although the PC upstream supply chain already saw early order pickup in the first half of 2025, this had limited impact on downstream brands' PC shipment forecasts for the rest of the year, and Lenovo is expected to continue to increase its market share.