Analyst Ian Ing of MKM Partners gave an update on Advanced Micro Devices, Inc. (NASDAQ:AMD). The analyst is bullish towards AMD ahead of “sustained earnings leading to earnings multiple based valuations.”
The analyst used his estimates to state a 1.76x EV/17 Sales ratio for AMD. This EV/Sales ratio is at the low-end of the range for AMD’s competitors. This includes ON, MU and MRVL. AMD’s forward EV/Sales multiples have “recently trended toward the upper end of six-year historicals.” This indicates improved prospects for AMD led by its new product pipeline which includes Zen server in 1H17.
Ing’s noted, “Our estimates are unchanged. AMD is experiencing a slow transition to nextgen Polaris architectures. Our proprietary web scrapes show only 1 card SKU presently in stock for both the RX 480 and RX 470. The lack of availability suggests little present upside to current GPU revenues (~25% of sales).”
Ing maintained his Buy rating on AMD, while raising his price target to $8.00 (from $6.50), marking a 21% increase from current levels.
According to TipRanks, the analyst has a yearly average return of 20.1% and a 74% success rate. The analyst has a 29.5% average return when recommending AMD, and is ranked #66 out of 4,101 analysts.
TipRanks shows that out of the 15 analysts who rated AMD in the last 3 months, 27% gave a Buy rating, 33% gave a Hold rating and 40% gave a Sell rating. The average 12-month price target for the stock is $5.15, marking a 22.09 % downside from current levels.
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