IQE one of 'best placed' superconductor supply chain - Barclays

Barclays analysts consider IQE one of the "best placed names" in the superconductor supply chain, but trimmed its target price on the Cardiff based company on Wednesday.

Barclays sees IQE as well placed for near-term growth in 3D sensing and long-term adoption of compound semiconductors, with a "leading position in epiwafers for wireless and photonics".

Despite this, analysts said they hear consistent investor concerns about IQE's competitiveness.

The AIM-listed company's late-July trading update addressed both near- and long-term fears and the Barclays analysts were "encouraged" that first-half sales are in-line with targets, full year expectations were endorsed, and that contract wins were strong in wireless and photonics.

"As for the near term, fears rose across the 3D sensing chain over the past months given worries about Apple demand," which led the analysts to reduce their price target to 170p from 210p, "not due to a fundamental change in our model, but rather to the expectation of the above concerns leading to compressed multiples for the near future".

Barclays retained confidence in its above-consensus forecasts for 2019 and 2020 and reiterated its 'overweight' rating.