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(Sharecast News) - Jefferies downgraded Raspberry Pi on Wednesday to 'hold' from 'buy' "pending visibility of recovery", but hiked the price target to 770p from 448p.
The bank said DeepSeek's approach on low-cost AI training and inferencing should result in the faster proliferation of edge AI across industrial applications.
"Raspberry Pi is well positioned to benefit, with edge AI and semiconductor sales likely to become significant contributors over 3-5 years," it said.
However, it also said that near-term visibility is low as destocking persists and that it has cut its estimates.
Based on the lower units guidance, Jefferies cut its 2024 revenue estimate to $260mn from $282m. This takes its adjusted EBITDA estimate for 2024 to $36.3m, in line with the trading update guidance of at least $36mn.
"We regard 2025 as a transition year, before an acceleration in board sales into 2026," it said.
This results in the bank's sales forecast being dropped from $324m to $291mn and its adjusted EBITDA from $48.8m to $42.4mn.
"After a slight decline in sales in 2024 due to the inventory correction, this represents an acceleration back to 12% growth in 2025," it said.
"Based on new wins on CM5 and edge AI contributing from 2026, we model sales growth to accelerate to 17.3% and 18.4% in 2026/27 respectively."
At 0950 GMT, the shares were down 3.7% at 717.07p.
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