Canaccord analyst Matt Ramsay recently hosted investor meetings in New York and Boston last week with Forrest Norrod, senior vice president and general manager of the Enterprise, Embedded, and Semi-Custom business at Advanced Micro Devices, Inc. (NASDAQ:AMD) as well as with Ruth Cotter, Corporate Vice President of Investor Relations. Following the meeting and commending the semi-conductor giant for “several catalysts to come,” the analyst asserts that in spite of recent stock appreciation and volatility, he continues to gain confidence in the company.
As such, the analyst reiterated a Buy rating on shares of AMD while boosting the price target from $8.50 to $8.75, which represents just under a 32% increase from current levels.
Specifically, Ramsay commends AMD’s resurgence as a rival to Intel with an “on-track” Zen roadmap, the company’s “gradual unit share recovery in low market tiers with Polaris,” which he believes the Vega launch will further bolster, and “ramping gaming console revenue with stronger ASP’s,” thanks to the company’s stellar alliances with Microsoft and Sony.
“While we recognize that roadmap execution, competition and financial risks remain, we remain impressed with the new management team and anticipate a quick recovery to solid profitability given lower expense levels necessitated by the company’s recent struggles. Finally, we believe risk/reward remains unbalanced to the upside, despite the recent stock move and volatility, and we reiterate our BUY rating and raise our price target to $8.75 given gradually increasing confidence in the CPU and GPU roadmaps and in 14nm yields and 7nm roadmaps at partners Global Foundries – given foundry influences from both Samsung and IBM – and at TSMC,” Ramsay concludes.
Though the analyst sings the praises of AMD’s forthcoming product roadmap, leading to boosted 2017 and 2018 revenue projections, he cuts IPR estimates from THATIC from $82 million in 2016 to $60 million in 2017 and 2018. The analyst’s non-GAAP EPS forecasts remain above the Street.
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, five-star analyst Matt Ramsay is ranked #116 out of 4,209 analysts. Ramsay has a 60% success rate and garners 12.6% in his annual returns. When recommending AMD, Ramsay yields 5.2% in average profits on the stock.
TipRanks analytics indicate AMD as a Hold. Based on 16 analysts polled in the last 3 months, 5 rate a Buy on AMD, 9 maintain a Hold, while 2 issue a Sell. The 12-month price target stands at $6.88, marking a nearly 3% upside from where the shares last closed.