TD Cowen Raises Price Target on Ultra Clean Holdings by 17%

TD Cowen's Krish Sankar raised their price target on Ultra Clean Holdings (NASDAQ: UCTT) by 17% from $47 to $55 on May 7, 2024. The analyst maintained their Strong Buy rating on the stock.

Ultra Clean Holdings, a leading developer and supplier of critical subsystems, components, and ultra-high purity cleaning and analytical services for the semiconductor industry, recently delivered a strong performance in the first quarter of 2024. Sankar, after reviewing the company's Q1 2024 earnings, stated that Ultra Clean Holdings exceeded expectations and believes that the company has surpassed the "cyclical low point."

In Q1 2024, Ultra Clean Holdings reported earnings per share (EPS) of $0.27, beating the consensus estimate of $0.14 and showing a significant increase of 42.1% compared to the same quarter in the previous year. The company also reported revenue of $477.7 million, surpassing the consensus estimate by $22.85 million and marking a 10.2% increase from Q1 2023.

Looking ahead to Q2 2024, Ultra Clean Holdings' management provided guidance of EPS ranging from $0.16 to $0.36 and revenue between $465 million and $515 million. CEO Jim Scholhamer commented on the company's Q1 performance, stating that the higher revenue and earnings were driven by strength in shipments related to High Bandwidth Memory and advanced packaging supporting AI, as well as operational efficiencies associated with those shipments. While Scholhamer noted that this is not a clear sign of a broader industry recovery, he anticipates these areas to remain strong.

Another analyst, Charles Shi from Needham, also issued an update on UCTT on May 7, 2024. Shi raised their price target by 12%, from $50 to $56, and maintained their Buy rating on the stock.

According to data from WallStreetZen, 100% of top-rated analysts currently rate UCTT as a Strong Buy or Buy, with no analysts seeing it as a Hold or recommending selling the stock.

Since Ultra Clean Holdings' latest quarterly report on May 6, 2024, the stock price has increased by 2.6%. Comparing year-over-year, the stock has soared by 58.6%, outpacing the S&P 500's growth of 25.4% during the same period.

TD Cowen analyst Krish Sankar is highly regarded in the industry, ranking in the top 5% out of 4,577 Wall Street analysts according to WallStreetZen. Sankar specializes in the Industrials, Utilities, and Technology sectors and boasts an average return of 23.3% and a win rate of 73.4%.

Ultra Clean Holdings, Inc., headquartered in Hayward, California, operates on a global scale, providing critical subsystems, components, and cleaning and analytical services for the semiconductor industry. The company supplies a range of products including ultra-clean valves, high purity connectors, industrial process connectors and valves, pneumatic actuators, manifolds and safety solutions, hoses, pressure gauges, and gas line and component heaters. They also offer chemical and gas delivery systems, various industrial and automation production equipment, fluid delivery systems, precision robotic systems, and more.

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