Entegris Poised for Long-Term Success Despite Near-Term Uncertainty, Says Mizuho Analyst

Mizuho's Kieran de Brun raised their price target on Entegris (NASDAQ: ENTG) by 15.3% from $98 to $113 on August 4, 2023. The analyst maintained their Strong Buy rating on the stock.

While near-term visibility remains uncertain with "various enigmas" in the second half of 2023 making the company's margins unpredictable, Entegris is "poised to win the long-term game and continues to demonstrate industry-leading outperformance and solid execution," the analyst bullishly said after leaving the company's Q2 2023 earnings call.

For Q2 2023, Entegris reported earnings per share (EPS) of $0.66, beating the Zacks Consensus Estimate of $0.58. However, it missed Q2 2022's EPS of $1.00 by 34%. The company's revenue for the quarter came in at $901 million, surpassing the Zacks Consensus Estimate of $885.5 million. This also represented a significant increase of 30.1% compared to Q2 2022's revenue of $692.49 million. Entegris also reported a net income of $99.6 million and an adjusted EBITDA margin of 27.2%.

Looking ahead to Q3 2023, Entegris management provided guidance. They expect EPS to be in the range of $0.57 to $0.62, revenue between $875 million and $900 million, net income from $86 million to $94 million, and an EBITDA margin of 26% to 27%.

CEO Bertrand Loy commented on the company's performance in Q2 2023, stating, "Our performance and execution in Q2 was solid and showcased the resilience of our unit driven model." He also highlighted growth in product lines important to customers' technology roadmaps, progress on key initiatives such as the CMC Materials integration, and the company's focus on debt reduction through divestitures.

According to analysts, 83.3% of top-rated analysts currently rate ENTG as a Strong Buy or Buy, while 16.7% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that Entegris' upcoming year will deliver earnings per share (EPS) of $4.92, reflecting a 693.5% increase on a year-over-year basis.

Since Entegris' latest quarterly report on August 3, 2023, the stock price has declined by 1.7%. Year-over-year, the stock is down 4.8%. During that period, ENTG has been trailing the S&P 500, which has seen a decline of 7.9%.

Mizuho analyst Kieran de Brun is ranked in the top 24% out of 4,288 Wall Street analysts, with an average return of 5.8% and a 56.7% win rate. Their expertise lies in the Consumer Cyclical, Technology, and Basic Materials sectors.

Entegris, Inc. develops, manufactures, and supplies microcontamination control products, specialty chemicals, and advanced materials handling solutions. The company operates in three segments: Specialty Chemicals and Engineered Materials (SCEM), Microcontamination Control (MC), and Advanced Materials Handling (AMH). Entegris serves various industries including semiconductor manufacturing, high-technology industries, solar industries, glass manufacturing, aerospace, and biomedical implantation devices. The company was founded in 1966 and is headquartered in Billerica, Massachusetts.

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