LNVGF - Lenovo: Revisiting AI Growth Potential And Valuations (Rating Upgrade)

2024-05-23 12:00:50 ET

Summary

• The outlook for Lenovo's key businesses is favorable, considering the positive read-throughs from the company's above-expectations Q4 results and relevant third-party industry research.
• Lenovo's stock is trading below fair valuation based on a comparison of its P/E metric with peers and its bottom line growth forecasts.
• I have assessed LNVGY to be an undervalued AI play, which has prompted me to raise my rating for the name to a Buy.

Elevator Pitch

I rate Lenovo Group Limited ( OTCPK:LNVGY ) ( OTCPK:LNVGF ) [992:HK] as a Buy.

My earlier article published on January 15, 2024 touched on AI PCs and Lenovo's valuations. In the current update, I revisit how Lenovo will benefit from AI-related tailwinds and take another look at the stock's key valuation metrics following the company's recent results' announcement....

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