J.P. Morgan opened coverage of Swiss instrumentation specialist Inficon at an "overweight" recommendation, assigning a December 2027 price target of CHF130 - about 29.7% higher than the company’s closing price of CHF100.20 on March 31. The broker’s note positions Inficon to benefit from a projected upcycle in wafer fabrication equipment (WFE) and anticipates earnings revisions to the upside across the medium term.
The bank models a 10% compound annual growth rate (CAGR) in group sales from 2025 through 2028 and an operating profit CAGR of 22% over the same interval. On profitability, J.P. Morgan’s estimates for 2027 and 2028 earnings per share stand at $5.85 and $6.71 respectively - roughly 12% above Bloomberg consensus for both years. For revenue, the brokerage’s 2027-2028 forecasts are 4% to 5% higher than consensus.
J.P. Morgan highlighted the semiconductor and vacuum coating division as the principal growth engine. That unit represented 49% of Inficon’s 2025 revenue in the bank’s framework. The firm projects a 17% CAGR for the division through 2028, noting the business achieved a 12% CAGR in 2020-2025 and linking the acceleration to projected WFE growth of 21% in 2026 and 18% in 2027 in its model.
Inficon’s own guidance for 2026 indicated group revenue between $680 million and $720 million and an operating margin range of 17% to 19%. J.P. Morgan adopted the top end of Inficon’s revenue guidance, modeling $720 million for 2026 and estimating an 18.4% operating margin for that year.
The bank’s margin analysis traces the dip in operating margin to several near-term costs. Operating margin declined to 16.7% in 2025 from 20.3% in 2024, pressured by tariff-related restructuring costs the company estimated at roughly $10 million, currency headwinds equating to 150-200 basis points, and dual-running production expenses of 50-250 basis points in the second and third quarters of 2025. J.P. Morgan anticipates margins will rebound to 21.4% in 2027 and to 22.3% in 2028 as volume leverage, the wind-down of restructuring expenses, and pricing support profitability.
Valuation in the J.P. Morgan note applies a 19.0x multiple to 2028 EBIT of $202 million, producing an implied enterprise value of $3.83 billion and underpinning the CHF130 price target. The chosen multiple equates to a 33% discount versus Swiss peer VAT Group (VACN.S) and about a 10% premium relative to the broader sub-system supplier group used for peer comparison.
On market performance, Inficon’s shares have risen 3% over the past six months, trailing a 32% median gain recorded by sub-system peers in the same period. The bank also observed that 2027 consensus EPS for Inficon has been revised down by approximately 3% over the recent interval, while the peer median has seen an 8% upward revision.
Key takeaways
- J.P. Morgan initiates coverage at "overweight" and sets a CHF130 price target for December 2027.
- The broker expects Inficon to outpace consensus on sales (4-5% above) and EPS (12% above) in 2027-2028, driven by a WFE-led semiconductor and vacuum coating division projected to grow at a 17% CAGR through 2028.
- Operating margins, pressured in 2025 by restructuring, currency headwinds and dual-running costs, are forecast to recover to the low- to mid-20% range by 2027-2028.
Risks and uncertainties
- Input cost escalation - particularly rising chip prices - could compress margins and affect the pass-through of costs. This has direct implications for semiconductor equipment suppliers and capital goods manufacturers.
- Increased competition from Chinese domestic players poses a risk given Inficon’s estimated roughly 25% revenue exposure to China, which could pressure market share in the region.
- Currency movements - specifically a weakening USD versus CHF and EUR - could alter reported results and profitability for a firm with multinational exposures.
- Lower-than-expected R&D investment or significant large-scale M&A activity could materially change the company’s growth trajectory and risk profile.
The J.P. Morgan initiation frames Inficon as a beneficiary of an anticipated semiconductor equipment cycle while calling out near-term cost and currency challenges. The valuation anchor and margin path in the note reflect expectations for a renewed volume cycle, pricing support and a gradual rolloff of restructuring-related expenses.