Applied Materials and Advanced Energy Upgraded Amid Strong Semiconductor Equipment Spending
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Source: seekingalpha
- Industry Spending Outlook: Analyst Mehdi Hosseini highlighted that the semiconductor capital equipment sector is expected to reach $120 billion in spending, and while supply chain bottlenecks make the path to $150 billion volatile, the overall trend remains strong, indicating industry resilience.
- Company Earnings Forecast: Hosseini anticipates that company-specific earnings for Applied Materials and Advanced Energy will grow at a compound annual growth rate exceeding 25%, with the cycle extending for several years, providing investors with confidence in long-term growth.
- Rating and Price Target Adjustments: Applied Materials' rating was upgraded from Neutral to Positive, with the price target raised from $180 to $400, while Advanced Energy's rating was also upgraded to Positive, with the target price increased from $190 to $300, reflecting the analyst's optimism about both companies' future performance.
- Free Cash Flow Support: The analyst noted that semiconductor equipment companies are achieving double-digit free cash flow margins, which not only supports an uplift in valuation multiples but also indicates a healthy financial status in the industry, further attracting investor interest.
Analyst Views on AEIS
Wall Street analysts forecast AEIS stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for AEIS is 214.50 USD with a low forecast of 175.00 USD and a high forecast of 255.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
10 Analyst Rating
7 Buy
3 Hold
0 Sell
Moderate Buy
Current: 219.590
Low
175.00
Averages
214.50
High
255.00
Current: 219.590
Low
175.00
Averages
214.50
High
255.00
About AEIS
Advanced Energy Industries, Inc. provides engineered, critical, precision power conversion, measurement, and control solutions to its customers. The Company designs, manufactures, sells, and supports precision power products that transform, refine, and modify the raw electrical power coming from either the utility or the building facility and convert it into various types of controllable, usable power that is predictable, repeatable, and customizable to meet the necessary requirements for powering a range of complex equipment. The Company's precision power products and solutions are designed to enable new process technologies, improve productivity, and provide critical power capabilities for its customers. Its support services include warranty and non-warranty repair services, calibration, upgrades, and refurbishments of its products. The Company’s products are sold in the Semiconductor Equipment, Industrial and Medical, Data Center Computing, and Telecom and Networking markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
