Wells Fargo analyst David Wong was out with a research note on shares of Advanced Micro Devices, Inc.(NASDAQ:AMD), reiterating an Outperform rating with a valuation range of $4.00 to $4.50, following a number of investor meetings in Dublin, Milan, Switzerland, and London with AMD’s CEO Lisa Su and Senior Vice President Ruth Cotter.
Wong wrote, “We are impressed with AMD’s clear product and financial strategy, and expect that over the next several quarters AMD will be able to continue the market share and balance sheet progress that has become evident in recent reports […] AMD has focused its product development efforts on a number of key projects over the last two years. AMD expects to introduce its next generation GPU (graphics processing unit) 14nm Polaris family mid-2016 with revenues ramping from these products in 2H 2016. AMD expects to begin sampling its 14nm Zen server processors to selected customers in the current (June) quarter and ramp revenues from these products in 2017. In addition to its current two semi-custom products for game consoles, AMD expects revenues from its new semi-custom business to begin in 2H 2016.”
“AMD’s long-term targets include gross margin of 36-40%, operating margin of more than 10%, and free cash flow roughly equal to net income. We think these are realistic goals which the company is likely to achieve by continuing to execute on its current strategy,” the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst David Wong has a yearly average return of 11% and a 66% success rate. Wong has a 4% average return when recommending AMD, and is ranked #216 out of 3951 analysts.
Out of the 20 analysts polled by TipRanks, 5 rate Advanced Micro Devices stock a Buy, 10 rate the stock a Hold and 5 recommend to Sell. With a downside potential of 27%, the stock’s consensus target price stands at $3.09.