Imagination Technologies Group Plc rose to the highest price in almost 18 years after Goldman Sachs said the U.K. company’s royalties from designs used in Apple’s new iPad and other tablets and smartphones will boost earnings.
“IMG remains at the heart of some of the most significant smartphone and tablet ecosystems,” analysts including Simon Schafer said today in a note to investors. Goldman predicted that the shares will rise to 1,000 pence in 12 months, up from a previous target of 850 pence.
IMG, based in Kings Langley near London, gained as much as 7.6 percent to 688 pence, the highest price since July 1994, and was up 7 percent at 10:32 a.m.
Natixis said today that the new iPad’s graphic processor was “probably shipped by Imagination.” IMG’s stock has gained 13 percent since Cupertino, California-based Apple unveiled the third version of its iPad tablet computer on March 7. Apple is touting improved graphics in the device, which has a price tag of $499 to $829 in the U.S.
IMG “remains agnostic” in the battle between ARM Holdings Plc and Intel Corp. to supply central processing units, or CPUs, for phones and tablets, the Goldman analysts said. The company has a “dominant position” in Apple’s operating system and a shared market for supplying devices that use Google Inc.’s Android system, they said.
Intel, based in Santa Clara, California, and Apple are among the shareholders in Imagination Technologies, according to Bloomberg data. The U.K. maker of semiconductor devices has the highest growth potential among European technology companies covered by Goldman, said Schafer, along with analysts Alexander Duval and Jo Blackshaw.
Demand for the company’s products is growing “strongly,” Chief Executive Officer Hossein Yassaie said March 8. “They are powering the transition in several markets to smart devices -- in particular phones, tablets, TVs and in cars.”
Imagination Technologies also makes PURE brand digital radios.