BMO Sets Expectations on AMD Stock Ahead of Earnings


With just a week until Advanced Micro Devices’ (NYSE:AMD) second-quarter earnings report, BMO Capital analyst Ambrish Srivastava is out with a few expectations. Let’s take a look.

For 2Q18, Srivastava expects revenues of $1.73 billion, up 5% q/q and EPS of $0.14, roughly in line with consensus. For the Computing & Graphics segment, the analyst expects revenues to be roughly flat q/q in 2Q18. Furthermore, GPU related revenues are expected to be down 5% q/q. The analyst expects client computing to be up 9% q/q with unit volume up 5% q/q and ASPs up 4% q/q. For the Enterprise, Embedded and Semi-Custom segment (32% of total), Srivastava expects revenues to be up 13% q/q.

For 3Q18, Srivastava expects revenues of $1.71 billion, down 1% q/q, and EPS of $0.13, compared to consensus estimates of $1.76 billion, roughly flat q/q and EPS of $0.13.

Srivastava stated, “Shares of AMD have roared back this year to date. We believe strong execution, and very high short interest has helped as well. The company so far has also been able to withstand the weakness in crypto mining, which we believe finally started to manifest in the supply-chain in 2Q. Based on our checks, graphics card shipments ended down 18% q/q in 2Q vs. average seasonality of -6%. This follows a muchabove-seasonal 1Q, -1% vs. normal down 10%, on a q/q basis.”

Net net, Srivastava remains cautious long-term on AMD shares, with a Market Perform rating and price target of $12, which reflects a potential downside of -29% from last closing price.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ambrish Srivastava has a yearly average return of 12.9% and a 75% success rate. Srivastava has a 23.8% average return when recommending AMD, and is ranked #515 out of 4840 analysts.

TipRanks suggests caution has Wall Street fairly divided in its expectations on AMD. Out of 14 analysts polled in the last 3 months, the bulls rule the majority, with 7 analysts rating a Buy on the chip giant, 5 maintaining a Hold, and 2 issuing a Sell. 

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