On Thursday, TD (TSX:TD) Cowen demonstrated confidence in Teradyne (NASDAQ:TER) by raising the price target on the company's stock to $125 from the previous $115. The firm has maintained a Buy rating on the shares. The upgrade follows Teradyne's positive outlook for the June 2024 quarter and an expected increase in year-over-year revenues for the calendar year 2024, revising up from earlier projections of flat growth.
The analyst from TD Cowen acknowledged that Teradyne appears to have navigated past the cyclical bottom it encountered in the March 2024 quarter. The firm anticipates that high bandwidth memory (HBM) testing and industrial automation will drive growth in the second half of the year. However, the mobility test segment is projected to emerge as a growth factor in calendar year 2025.
Teradyne's updated guidance suggests a low single-digit (LSD) year-over-year revenue growth for the calendar year 2024, which marks an improvement from the company's previous forecast. This update has contributed to the analyst's decision to reiterate a Buy rating and increase the price target.
The company's performance and future prospects seem to be buoyed by its segments in HBM testing and industrial automation. These areas are expected to lead the charge in the company's growth strategy for the latter half of the year. The mobility test segment, while not a contributor to growth in 2024, is anticipated to become significant in the following year.
TD Cowen's revised price target of $125 reflects a more optimistic view of Teradyne's market position and financial outlook, as the company moves beyond the challenges faced in the earlier part of the year. The firm's analysis indicates a positive trajectory for Teradyne's business moving forward.
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