CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We reduce our 12-month target to $125 from $145, on P/E of 23x our ’25 EPS view, which we start at $5.44, below historical but above peers. We adjust our ’23 EPS estimate to $2.73 from $2.87 and ’24’s to $4.31 from $4.41. AMD posts Q3 EPS of $0.70 vs. $0.67, beating the $0.68 consensus view. Sales rose 4%, slightly ahead of expectations, as growth in Client (+42%) was partly offset by declines in Gaming (-8%) and Embedded (-5%). Data Center was flat. We are encouraged by PC recovery, led by higher Ryzen sales, but note a mildly disappointing Q4 guide on Embedded/Gaming weakness (sales of $6.1B/GM of 51.5% vs. $6.4B/52% consensus). We remain extremely optimistic about AMD’s data center pipeline on both the CPU and GPU side, with its 3nm Turin offering (based on Zen 5) to ramp in 2024 while data center GPU revenue (Instinct MI250/MI300 GPUs) is now seen reaching $400M in Q4/$2B in ’24 (implies 7%-8% of ’24 sales). We expect Embedded softness (legacy Xilinx) to persist into 1H ’24, which will pressure margins.