AMD: We Recommend Investors With A LT Horizon Take Advantage Of The Dip, Says Wedbush
In a research report issued July 18, Wedbush analyst Betsy Van Hees reiterated an Outperform rating on Advanced Micro Devices (AMD) with a $6 price target, despite missing analysts’ expectations for earnings in the second quarter.
Van Hees wrote, “Best Ideas List (BIL) AMD reported Q2 pro forma EPS a penny light on largely in-line revenue guiding Q3 below high expectations, including our own. Although the Q3 guide was muted hampered by (1) unpredictable seasonality for 1st year cycle of console shipments, (2) slow down of crypto currency mining demand, and (3) uncertain demand for consumer PCs, we view the 4th consecutive quarter of profitability, tight OpEx controls, and continued product execution as considerable positives. We also think given consumers’ unknown appetite for PCs that the Q3 guide has quite a bit of conservatism built into it. We placed AMD on our BIL as we believed it was the most under-appreciated turnaround story in our universe. We think the price decline was an overreaction and reiterate our OUTPERFORM rating. We recommend investors with a long term (LT) horizon take advantage of the dip to build positions as we believe the fundamentals remain intact and this turnaround story isn’t just a one quarter phenomenon. We continue to believe AMD is poised to benefit into 2015 from (1) gaming consoles ramp, (2) product diversification into embedded, (3) stabilization in PC market and better product positioning in commercial, and (4) share gains in GPUs driving sustainable Q/Q profitability”.
According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Betsy Van Hees has a 24% average return and a 71% success rate. Van Hees has a -10% average return when recommending AMD, and is ranked #75 out of 3222 analysts.