2023-07-17 14:25:48 ET
Investment firm B. Riley upgraded semiconductor equipment company Cohu ( NASDAQ: COHU ) on Monday and tweaked its estimates on several other chip equipment companies after coming away positive from a recent semiconductor conference.
Cohu ( COHU ) shares rose more than 4% on Monday after analyst Craig Ellis boosted his rating to buy from neutral and added that there are a number of "substantive opportunities" and product gains the company is making in this down-cycle to position itself to see strong revenue acceleration and gross margin expansion when spending turns around.
Ellis also raised his per-share price target on Cohu ( COHU ) shares to $50 from $38, calling the stock "still cheap."
In addition, Ellis raised his per-share price target on several chip equipment companies. He raised his target on Axcelis Tech ( ACLS ) to $225 from $165, noting that the company could generate $1.3B in calendar 2024 sales as silicon carbide takes off.
He also raised his target on Applied Materials ( AMAT ) to $175 from $150, citing "an above industry" growth profile in 2023 and 2024 due to the new Vistera product platform, the coming EPIC Customer Collaboration Center and in-progress advanced architecture and packaging.
Others also seeing price target boosts include Camtek ( CAMT ), FormFactor ( FORM ), Ichor Holdings ( ICHR ), Kulicke and Soffa Industries ( KLIC ), Lam Research ( LRCX ) and Onto Innovation ( ONTO ) for a variety of reasons, including stabilizing demand in the sector.
"Our summary is that signs of a front- and back-end mid-C23 cyclical spending trough seemed broadly evident, signs of immediate order acceleration relatively sparse, yet optimism convincingly rising that solid [calendar 2024 and 2025 year-over-year] capex growth lies ahead while, in many cases, co-specifics are increasingly honed through the trough to accelerate growth and [gross margin] expansion when the spending inflection hits," Ellis wrote in an investor note.
Analysts are largely bullish on Cohu ( COHU ). It has a HOLD rating from Seeking Alpha authors , while Wall Street analysts rate it a BUY . Conversely, Seeking Alpha's quant system, which consistently beats the market, rates COHU a BUY .
More on Cohu
- Cohu: Valuation Is Not Cheap Anymore, Rating Downgrade
- Cohu: Optimistic Growth Targets But A Hold For Now
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B. Riley upgrades Cohu, tweaks estimates on chip equipment makers