Despite upgrading the stock, the analyst sees no EPS upside potential in AMD
Advanced Micro Devices, Inc. (NASDAQ:AMD) has earned itself an upgrade at Morgan Stanley, as analyst Joseph Moore upgraded the stock to Equal Weight. The analyst was quite surprised to see AMD trading at such levels and believes that he still doesn’t see any upside potential. Given the short and long-term profitability profile of the company, the current price of the stock is very unexplainable and the investors might be in for a rude awakening.
AMD stock is selling for around $10.90 at the given moment, which is more than twice as much the analyst’s previous price target of $5. The EPS consensus estimate for AMD is 4 cents and 26 cents for the next two years, which the analyst believes does not justify the current trading levels at all. Furthermore, the analyst points out that AMD has not been able to sustain execution in the past and he fears that this might be the case this time around as well.
Mr. Moore is clearly not a fan of AMD and believes that the upcoming launch of 10 nm products from Intel Corporation will surely spell doom for the company’s Zen based products. For the fiscal year 2017, the analyst has an EPS estimate of 31 cents which is far higher than that of consensus, but the question remains whether AMD be able to sustain the execution and deliver long term benefits to its shareholders. Will it once again disappoint like it has in the past? The analyst is above consensus on AMD.
The analyst raised the price target to $11 from $5 and upgraded the stock to Equal Weight from Underweight. The analyst ratings for AMD are 6 Buy, 4 Outperform, 14 Hold, and 2 Sell. The stock currently trades at a price of $10.87 and has gained 3.08% since the open today.