One analyst may be hedging his bets on Advanced Micro Devices, Inc. (NASDAQ:AMD), but ahead of tonight’s highly anticipated fourth quarter showcase, even this cautious analyst is boosting his expectations.
MKM analyst Ruben Roy is calling for a beat, cheering that this chip giant’s “stars appear to align, at least in the near-term.”
As such, with a “more positive near-term outlook,” the analyst reiterates a Neutral rating on AMD stock while bumping up the price target from $13 to $14.50, which implies a nearly 10% upside from current levels. (To watch Roy’s track record, click here)
“Recent positive data points around the PC, server and cryptocurrency mining markets suggest that AMD could be positioned to deliver stronger December quarter results and March quarter outlook relative to consensus estimates,” Roy explains, but likewise notes AMD’s bigger picture keeps him cautious down the line: “From a longer-term perspective, we continue to view the crypto market from a conservative stance and while we continue to appreciate AMD’s recent execution, we have yet to see evidence of meaningful share gains with the company’s recently introduced product families.”
Additionally, Roy would not be surprised to see AMD top its own guide that calls for a 15% revenue dip compared to the third quarter of 2017.
Ultimately, “We think most of the upside delta will be driven by the crypto market and, therefore, we think that Q4 results and Q1 outlook will be somewhat less important than management’s commentary on full year 2018 expectations. While we expect management’s tone to remain positive on new product deployments, we believe that AMD, appropriately, is likely to stay conservative with respect to longer-term guidance, for now,” contends the analyst.
For next year, Roy projects AMD can hit roughly 10% in revenue growth to achieve $6.48 billion and 45% in earnings growth soaring to $0.55 compared to his expectations for this year. These expectations more or less mirror the Street.
TipRanks highlights a Wall Street consensus playing it safe on AMD stock, but leaning towards a bullish perspective. Out of 12 analysts polled in the last 3 months, 7 are bullish on AMD stock, 3 remain sidelined, while 2 are bearish on the stock. With a return potential of nearly 23%, the stock’s consensus target price stands at $16.35.