Analyst Adjustment: Lowered FY2024 EPS Estimates for Advanced Micro Devices, Inc. (NASDAQ: AMD)

Overview

Equities researchers at Zacks Research recently revised their FY2024 earnings per share (EPS) estimates for Advanced Micro Devices (AMD). The semiconductor manufacturer, listed on NASDAQ as AMD, is expected to post earnings of $2.43 per share for the year, a slight reduction from the previous estimate of $2.44. This adjustment prompts a closer examination of the factors influencing this revision and its potential impact on AMD’s market standing.

Analyst Insights and Projections

Zacks Research’s Perspective

Zacks Research analyst A. Ganguly provided insights into the revised estimates, indicating a subtle downward adjustment in AMD’s anticipated earnings for FY2024. The new projection stands at $2.43 per share, compared to the previous estimate of $2.44. The consensus estimate for AMD’s current full-year earnings remains at $1.92 per share. Additionally, Zacks Research offered estimates for AMD’s FY2025 earnings, pegged at $3.40 EPS.

Comparative Analyst Reports

Examining reports from other analysts reveals varied perspectives on AMD’s performance. Barclays, for instance, increased its price objective on AMD shares from $120.00 to $200.00, giving the stock an “overweight” rating. Meanwhile, Susquehanna raised its price target to $170.00 with a “positive” rating. In contrast, Truist Financial adjusted its price target downward from $128.00 to $98.00, maintaining a “hold” rating.

MarketBeat’s Consensus Rating

According to MarketBeat’s data, AMD holds a consensus rating of “Moderate Buy” based on various analyst reports. This includes one sell rating, three hold ratings, twenty-four buy ratings, and one strong buy rating. The consensus target price for AMD’s stock is reported to be $146.50.

Stock Performance and Key Metrics

Recent Market Performance

AMD’s recent market performance has been notable, with the stock opening at $162.67 on the most recent trading day. The 12-month range showcases a low of $67.26 and a high of $168.60. As of the latest available data, AMD’s 50-day moving average stands at $134.26, while the 200-day moving average is $116.76.

Financial Metrics

AMD’s financial metrics provide additional context. The company boasts a market capitalization of $260.27 billion, with a price-to-earnings ratio (P/E) of 1,355.70. The debt-to-equity ratio is a minimal 0.03, highlighting a seemingly robust financial position. However, the P/E/G ratio of 4.29 suggests a potential growth premium factored into the stock’s valuation. The beta is reported as 1.70.

Earnings Snapshot

Last Quarterly Earnings

AMD last released its quarterly earnings data on Tuesday, October 31st. The semiconductor manufacturer reported $0.70 earnings per share (EPS) for the quarter, surpassing analysts’ consensus estimates by $0.02. With a return on equity of 5.61% and a net margin of 0.94%, AMD demonstrated positive performance. The quarter’s revenue of $5.80 billion exceeded the consensus estimate of $5.70 billion.

Year-over-Year Comparison

Compared to the same quarter in the previous year, AMD’s revenue witnessed a 4.2% increase. These figures suggest a trajectory of growth for the company, contributing to the overall positive sentiment among analysts.

Institutional Investor Activity

Adjustments to Holdings

Institutional investors have made notable modifications to their holdings of AMD. Symphony Financial Ltd. Co. acquired a new position in the fourth quarter, indicating confidence in AMD’s prospects. Gradient Investments LLC raised its stake by 5.8%, reflecting continued interest in the semiconductor manufacturer. Other institutional investors, including MBL Wealth LLC and Global Retirement Partners LLC, have also adjusted their holdings.

Insider Transactions

Insider transactions provide additional insight into AMD’s performance. CEO Lisa T. Su sold 75,000 shares in December 2023 at an average price of $117.73, generating a total value of $8,829,750. Following this sale, Su retains a substantial stake in the company, owning 3,347,640 shares valued at approximately $394,117,657.20. Other insider transactions, such as CAO Darla M. Smith’s sale of 4,000 shares, further contribute to the overall evaluation of AMD’s internal dynamics.

Company Profile

AMD’s Operations

Advanced Micro Devices, Inc. operates as a semiconductor company globally, engaging in four primary segments: Data Center, Client, Gaming, and Embedded. The company offers a range of products, including x86 microprocessors, graphics processing units (GPUs), chipsets, data center and professional GPUs, embedded processors, and semi-custom system-on-chip (SoC) products.

Analyst Recommendations and Conclusion

Diverse Analyst Perspectives

While Zacks Research has adjusted its FY2024 EPS estimates for AMD, other analysts present diverse perspectives. Barclays and Susquehanna maintain optimistic views, reflected in increased price targets and positive ratings. Truist Financial’s more conservative stance is evident in the adjusted price target and a “hold” rating.

Investor Considerations

Investors tracking AMD should carefully assess the array of analyst recommendations, performance metrics, and insider transactions. The consensus “Moderate Buy” rating indicates a generally positive sentiment, but individual risk tolerance and investment objectives should guide decisions. The ongoing monitoring of AMD’s financials, market performance, and industry trends will be crucial for informed investment strategies.