AXT Inc. price target lowered to $4.25 from $4.50 at Wedbush

Wedbush lowered the firm’s price target on AXT Inc. (AXTI) to $4.25 from $4.50 and keeps an Outperform rating on the shares. While the firm was expecting a headwind from Chinese licensing requirements, it did not anticipate AXT would compound softer sales with manufacturing execution issues that weighed further on gross margins and EPS. Having said this, with the company now trading at a fraction of its asset value, Wedbush remains bullish given the number of emerging opportunities and its expectation margin declines will be short-lived in nature and assuming China grants export licenses revenues likely inflect meaningfully in the second half of the year as AXT customers replenish InP inventories.