Wall Street Sets a Higher Floor for AMD

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Advanced Micro Devices Inc. (NASDAQ: AMD) released its most recent quarterly results after the markets closed on Tuesday. Analysts took the opportunity to weigh in on AMD, and for the most part they were fairly positive.

24/7 Wall St. has included highlights from the report, as well as what analysts are saying about the stock after the fact.

For the quarter, the chipmaker posted adjusted diluted earnings per share (EPS) of $0.06 on revenues of $1.27 billion. In the same period a year ago, the company reported EPS of $0.11 on revenues of $1.65 billion. First-quarter results also compare to the consensus estimate for EPS of $0.05 on $1.26 billion in revenues.

In its computing and graphics segment, AMD reported revenue of $831 million, down 26% year over year and 16% sequentially. The year-over-year decline was attributed to lower graphics channel sales, partially offset by increased client processor and datacenter GPU sales. The quarter-over-quarter decline was primarily due to lower client processor sales.

In the enterprise, embedded and semi-custom segment, revenue totaled $441 million, down 17% year over year and up 2% sequentially. The year-over-year revenue decline was primarily due to lower semi-custom product revenue, partially offset by higher server sales. The sequential increase was primarily driven by higher semi-custom revenue.

Nomura/Instinet raised its fiscal 2019 EPS target for AMD to $0.37 from $0.27, and 2020 was raised to $0.72 from $0.67. The firm thinks AMD is executing very well during a downturn in the chip environment and is gaining market share in microprocessors while also penetrating datacenter GPU/accelerator market.

Merrill Lynch reiterated a Buy rating with a $35 price objective. In its report, Merrill Lynch noted:

Q1/Q2 and full-yr inline despite weak demand environment flagged by INTC; keep est. unchanged, reit. Buy. Like: Q2 guide better than feared, GPU inv finally improving, GM expansion to continue on heels of new higher-margin launches. Risk: Q2 opex higher than est. ahead of launches, 2H sales guide keeps bar high, INTC could start to compete on price.

Here’s what a few other analysts had to say about AMD:

  • Cowen reiterated an Outperform rating and raised its price target to $36 from $33, and that is after an April 10 hike from $28 and a hike from $26 at the end of January.
  • Deutsche Bank reiterated a Hold rating and raised its price target to $25 from $20.
  • Mizuho reiterated a Buy rating and raised its price target to $33 from $28.
  • Barclays reiterated an Equal Weight rating and raised its price target to $28 from $26.
  • Wells Fargo reiterated an Outperform rating and raised its target to $38 from $30.

Shares of AMD were last seen at $27.59, in a 52-week range of $10.83 to $34.14. The consensus price target is $26.00.

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