Over the past half decade, almost no stock outperformed the market as Advanced Micro Devices (OMG) have. The huge market gains were a reflection of the company’s performance in the real world, which saw the chipmaker considerably narrow the gap compared to its traditionally much larger rival, Intel (INTC)
In addition to offering superior products, AMD made the most of Intel’s production delays to end CPU dominance. However, 2021 seems to be a different year than the recent ones. Intel has taken significant steps to reverse its business and has only recently appointed a new CEO, with an appropriate pedigree.
Deutsche Bank analyst Ross Seymore notes how the new figure at the helm of the rival can impact AMD’s advance.
“While we expect AMD to continue running on its new product ramps and any changes in INTC’s manufacturing strategy will not affect competitive intensity for at least 2-3 years, we expect this topic to weigh more and more in the AMD AMD thesis ”. the 5-star analyst noted. “Consequently, despite increasing our short-term revenue estimates (semi-customized revenue + higher PC CPU, with EPS falling slightly due to a higher tax rate in 2021), we expect the increased uncertainty around competitive intensity weigh on AMD’s already premium rating. “
While Seymore eases expectations for future performance, he expects AMD to exceed estimates when the company reports 4Q20 earnings early next month (February 2).
Seymore expects AMD to deliver revenue of $ 3.06 billion, an increase of 9% over the previous quarter, close to the upper limit of AMD’s guidance and above the $ 3.02 billion consensus estimate. While on the bottom line, Seymore anticipates EPS of $ 0.48, above its previous forecast of $ 0.47.
Looking ahead, while Seymore says that AMD may risk losing market share to Intel in the long run, “given the positive data points in the gaming ecosystem,” the analyst increased his 1Q21 revenue estimate from $ 2.76 billion to $ 2.84 billion (Street expects to $ 2.70 billion).
That said, for now, Seymore expects AMD’s shares to remain limited. The analyst values stocks as Hold, along with a target price of $ 90. (To look at Seymore’s history, click here)
Where is the rest of the street on the side of this chip player? AMD maintains a moderate purchase of the analyst consensus, based on 23 recent reviews. This includes 15 purchases, 6 retentions and 2 sales. The shares are trading at $ 89.45, and the average price target of $ 96.55 suggests room for about an 8% increase. (See AMD’s stock analysis at TipRanks)
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Disclaimer: The opinions expressed in this article are exclusively those of the analyst presented. The content should be used for informational purposes only. It is very important to do your own analysis before making any investments.