By Sam Boughedda
In a note on semiconductor stocks Friday, Piper Sandler's analysts previewed earnings for its top picks Advanced Micro Devices, Inc. (NASDAQ:AMD), ON Semiconductor (ON), and Impinj (PI).
The analysts also raised the firm's price targets for ON Semiconductor to $85 per share and Impinj to $140 per share.
Looking at the semiconductor market as a whole, the analysts stated the posture is constructive going into the prints this quarter, although "we are still in the middle of a fundamental bottoming process. In addition, Piper Sandler said the China reopening offers a tailwind.
On AMD, the analyst said it is "making good progress on its retail PC inventory clearing process, which appears to be track for normalized inventory levels in 1H23."
"We believe that AMD will exit the March 2023 quarter with inventories largely cleared out, which is on time with management's plan," the Piper Sandler team wrote.
For ON, he declared that the firm remains steadfast in its belief that ON is likely to beat December estimates and guide above March quarter estimates.
"ON has some top line flexibility when it comes the roll off of some of its legacy business. We estimate the legacy roll off in 2023 is worth between $400M-$450M and is dependent on customers' ability to source alternatives. ON will not leave its customers hanging here in our view," argue the analysts.
Finally, for Impinj, the analyst noted the company's preannouncement of positive preliminary earnings and revised its model to reflect the preannouncement and tailwinds from the logistics segment.
Piper Sandler highlighted the key drivers for the company's decision to revise estimates as its record backlog and Wafer upside from their supplier.