Imagination Technologies has suffered some profit taking after a surge on Thursday on news of a new Apple deal.
The company announced an extended licensing deal to supply its graphics and video technology to Apple, easing fears the US group planned to design its own graphic chips. Imagination jumped 14% on the news, but has now lost around 2.5%, down 4.7p at 180.4p. Roger Phillips at Investec said:
The Apple contract announcement is "status quo", with no forecast changes. We believe Apple has been licencing video intellectual property from Imagination from some time, with this merely being the first time it has been publicised, so we see no incremental royalty boost. Our view is a 2014 miss has been at least partially priced in below 200p, but this remains a sufficiently high risk to keep us from turning positive short term. The volatility in the shares causes us to stay at hold despite our target price [of 170p] being below the current price.
