Jefferies Analyst Lowers Price Target on AMD, Maintains Strong Buy Rating

By Don Francis, Editor
May 14, 2024 9:30 AM UTC
Jefferies Analyst Lowers Price Target on AMD, Maintains Strong Buy Rating

Jefferies's Blayne Curtis lowered their price target on Advanced Micro Devices (NASDAQ: AMD) by 5% from $200 to $190 on 2024/05/13. The analyst maintained their Strong Buy rating on the stock.

Curtis took coverage of the U.S. semiconductor names "with a bullish long-term view into a strong upcycle with duration." The analyst explained that the sector is "still early in the cycle" and that this particular cycle will be even stronger with AI.

Advanced Micro Devices (AMD) recently reported its financial results for Q1 2024. The company exceeded expectations with an EPS of $0.62, beating the Zacks Consensus Estimate and Q1 2023 by 3%. Revenue came in at $5.47 billion, surpassing the Zacks Consensus Estimate of $5.42 billion and Q1 2023's $5.35 billion by 2%. The gross margin for the quarter stood at 47%.

Looking ahead to Q2 2024, AMD's management guided for revenue in the range of $5.4 billion to $6 billion, with a gross margin of 53%. Chair and CEO Lisa Su expressed optimism about the company's performance, stating, "We delivered strong Q1 results with our Data Center and Client segments each growing more than 80% year-over-year driven by the ramp of MI300 AI accelerator shipments and the adoption of our Ryzen and EPYC processors."

The analyst's downgrade and price target revision for AMD were not isolated events. On May 13, 2024, Curtis also made changes to other names in their portfolio. They lowered their price target on Applied Materials Inc by -2.3%, from $215 to $210, and downgraded the stock from Strong Buy to Hold. They also lowered their price target on Interdigital Inc by -5.7%, from $106 to $100, and downgraded the stock from Strong Buy to Hold. Furthermore, Curtis reduced their price target on Navitas Semiconductor Corp by -60%, from $10 to $4, and downgraded the stock from Strong Buy to Hold. Lastly, they lowered their price target on Arteris Inc by -18.2%, from $11 to $9, and downgraded the stock from Strong Buy to Hold.

Despite the downgrade, AMD still has strong support from analysts. According to data from WallStreetZen, 92% of top-rated analysts currently rate AMD as a Strong Buy or Buy, while 8% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that AMD's upcoming year will deliver earnings per share (EPS) of $2.5. If the analysts are correct, this would represent a year-over-year increase of 262.6%.

Examining AMD's stock performance, it is worth noting that since the company's latest quarterly report on April 30, 2024, the stock price has declined by 4.9%. However, on a year-over-year basis, the stock is up by an impressive 54.6%. During this period, AMD has outperformed the S&P 500, which has seen a 26.2% increase.

Blayne Curtis, the Jefferies analyst responsible for the recent downgrade, is ranked in the top 4% out of 4,581 Wall Street analysts by WallStreetZen. Curtis specializes in the Technology and Communication Services sectors and has an average return of 13.4% with a 50% win rate.

Advanced Micro Devices, Inc. is a global semiconductor company that operates in two segments: Computing and Graphics, and Enterprise, Embedded, and Semi-Custom. The company's product portfolio includes x86 microprocessors, chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs, and development services. AMD also offers server and embedded processors, semi-custom System-on-Chip (SoC) products, and technology for game consoles. The company's processors are used in desktop and notebook computers, while its graphics products cater to both desktop and notebook PCs. AMD serves various sectors, including original equipment manufacturers, public cloud service providers, system integrators, and more.

What are the top analysts saying about Advanced Micro Devices?

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