Macquarie cuts Delta Thailand target by 21.62% to 290 baht after third-quarter results
Key Facts
Macquarie cut its price target for Delta Electronics (Thailand) to 290 baht from 370 baht, the biggest reduction among four institutions that revised their estimates after the third-quarter 2026 results. The cut was 80 baht, or 21.62%, according to Kaohoon International. UBS also cut its target to 300 baht from 320, and JPMorgan to 320 baht from 360. Citi lowered its target to 315 baht from 367, a reduction of 14.17%. The revisions followed results showing net profit below Bloomberg consensus, amid a weaker operating margin and higher expenses.
Bloomberg estimated quarterly net profit at 8,734 million baht, a level Kaohoon said the result fell short of. This coincided with the operating margin narrowing to 10.4%, compared with 14.1% in the third quarter of 2025. Selling and administrative expenses jumped 69.4% year on year, weighing on operating profitability. Costs included higher technology royalties paid to the parent company, shipping expenses and U.S. customs duties recognized under compensation arrangements with customers. The company also booked an additional tax provision of 1,363 million baht under the OECD's Pillar Two framework, while foreign-exchange gains of 503 million baht offset part of the pressure.
Performance varied across the company's businesses: Thairath Money said mobility segment sales fell 23% year on year. The company said, according to the newspaper, that its electric vehicle power business showed only limited signs of recovery during the quarter. This is part of a broader business that the company describes as combining energy solutions, thermal management and electronic component manufacturing. Its portfolio includes power electronics systems and components for the information technology, automotive, telecommunications and industrial sectors. This divergence places mobility results alongside the company's other business areas, without changing the fact that costs weighed on the operating margin.
In the market, Thairath reported that the stock closed the morning session on October 28 at 234 baht, down one baht, or 0.43%, after falling in the previous session. Stock Exchange of Thailand data showed the stock closing the same session at 232 baht, down 3 baht, or 1.28%. Thairath also cited the Investment Analysts Association consensus, which showed that 17 of 19 analysts recommended buying after the results announcement, while one recommended holding and another selling. These figures present a mixed picture: institutions cut their targets while most analysts in that consensus maintained buy recommendations. Second-quarter profit was 6,074,598 thousand baht, compared with 4,629,056 thousand baht in the second quarter of 2025, according to the company's disclosure published on the Stock Exchange of Thailand.
Looking ahead, Krungsri Securities said it views second-quarter earnings as the bottom and expects fourth-quarter earnings to recover above the third-quarter level. It sees a high likelihood of product price increases by the first quarter of 2027 at the latest to address cost pressures. On its investor relations calendar, Delta scheduled a SET Opportunity Day session and meetings with analysts on October 28, followed by a meeting with JPMorgan on October 29. The company's calendar also listed another meeting with JPMorgan on October 30, described as an investor meeting after the third-quarter results. These meetings provide near-term opportunities for the company to present and discuss its results with investors and analysts.