AMD (AMD) PT Raised to $9 at Jefferies Amid Increased Product Cycle Visibility
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(Updated - September 1, 2016 12:04 PM EDT)
Jefferies analyst Mark Lipacis reiterated a Buy rating and raised estimates and his price target on AMD (NASDAQ: AMD) to $9.00 (from $6.75) citing increased visibility to product cycles.
Specifically, the analyst highlighted:
1) recent channel checks that suggest AMD's new Zen MPU (Summit Ridge, 1Q17) could take share in mid-tohigher end desktops,
2) AMD's successful launch of its 14nm FinFET GPU platform (Polaris), and
3) Semi-Custom design win at the currently unannounced Sony PlayStation Neo which we think will carry a higher ASP.
Further, the analyst said AMD's Zen MPU for Desktop could take share and that the recent GPU share gains (700 bps) are sustainable.
Lipacis said more upside could come from non-gaming, semi-custom design wins and another IP deal by year-end.
"AMD has diversified its revs from 100% PC to 58%/42% SC/PC," the analyst commented. "AMD's success in the SC business has been limited to the gaming market, but the company expects to ramp a non-gaming, ARM64 solution in 2H16. AMD's SC target markets are Datacenter, Consumer & Embedded - we don't know but suspect Datacenter. In the meantime, we expect it to ramp a higher ASP semi-custom chip into the Playstation NEO this fall, and another higher ASP chip into Microsoft Xbox (Scorpio) in 2017."
FY 2016 EPS estimates goes from ($0.21) to ($0.20) and FY 2017 EPS goes from ($0.06) to ($0.05). FY 2016 revenue estimates go from $4.13 billion to $4.204 billion and FY 2017 revenue estimates go from $4.236 billion to $4.712 billion.
Shares of AMD closed at $7.40 yesterday.
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