In a report published Friday, Canaccord analyst Matthew Ramsay maintained a Hold rating on Advanced Micro Devices, Inc. (NASDAQ:AMD), while reducing the price target from $2.25 to $2.00. The company reported its 2Q15 revenue of $942 million, down 8% Q/Q and 35% Y/Y. Management guided 3Q15 revenue of roughly $1 billion, compared to Ramsay’s $1.13B estimate.
Ramsay wrote, “Consistent with the recent pre-announcement, AMD reported disappointing Q2/15 results. While we believe AMD’s diversification strategy continues to show gradual progress and a refreshed roadmap could position the company for more defensible long-term sales, AMD has not been able to stem the decline of its Computing & Graphics business – down ~46% Y/Y in 1H/15 – especially as the PC market has weakened following a stronger 2014.”
Furthermore, “While yet another pending restructuring, the SeaMicro business exit, and more reliance of NRE-funded R&D with new semi-customer business should lower operating expenses to manage gross cash within the target range as new products launching and into an improved PC market during 2H/15, we worry PC headwinds will persist through 2016 and AMD’s most important new products will likely not ramp fully for another 18 months.”
Bottom line, despite believing in the leadership under AMD’s new CEO Lisa Su, the analyst continues to wait for tangible signs of core business stability or new product inflection before becoming more constructive on shares.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matthew Ramsay has a total average return of 7.1% and a 55.4% success rate. Ramsay has a -33.1% average return when recommending AMD, and is ranked #930 out of 3712 analysts.
Shares of AMD were up 1.60% percent in Friday’s pre-market session.