Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Teradyne Downgraded - Smartphone and Consumer Markets Impact Outlook

Published 2022-07-28, 03:50 p/m
Updated 2022-07-28, 03:50 p/m
© Reuters.

© Reuters.

By Sam Boughedda

A Craig-Hallum analyst downgraded Teradyne (NASDAQ:TER) to Hold from Buy and lowered the firm's price target to $96 from $138 in a note to clients Thursday.

The analyst said Teradyne, an automatic test equipment designer, and manufacturer, was downgraded as mobile and consumer markets weaken.

"Teradyne guided Q3 and the remainder of the year well below expectations as the company sees softening smartphone and consumer markets materially impacting its outlook," said the analyst. "The company now sees the 2022 SoC semiconductor test TAM to be ~$4.2-$4.6 billion, down from expectations a quarter ago of near $5.0 billion. The company is also seeing headwinds in its Industrial Automation business from COVID lockdowns in China, distributor staffing shortages in the U.S., and FX headwinds from a weakened Euro."

The analyst explained that while the company has short lead times, which can lead to an aggressively cyclical business, they believe the company will recover on the back side of the current market adjustment, but with a lack of visibility as to when and the magnitude of, a cyclical recovery they lowered the multiple they were previously using to value the company on its long-term EPS power of $8.

"Given the lack of visibility we are stepping to the sidelines and downgrading shares to a Hold with a $96 price target. Our price target is based on 12x the company's long-term EPS power (down from our previous ~17x P/E price target multiple)," concluded the analyst.

Despite an earlier fall, Teradyne shares are up 0.6% Thursday.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.