Mizuho Raises Advanced Micro Devices (AMD) Price Target But Keeps Neutral Rating
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Mizuho Securities analyst, Vijay Rakesh, reiterated his Neutral rating on AMD (NASDAQ: AMD) but raised his price target to $7.00 (from $5.50) after AMD announced an updated 5-year wafer supply agreement (WSA) with GLOBALFOUNDRIES (GF) through December 31, 2020. The agreement establishes a framework for collaboration from the 14nm to the 7nm node. The analyst views the stock as a show me story though.
AMD is taking some of the $335M in expenses as a one-time charge in 3Q16, and issuing a 75M share in the-money warrant to Mubadala. The analyst believes "it is getting to be show me time for Zen" and the stock values the recent financial improvement. "Further upside will likely depend on high margin server traction with Zen which could be much more challenging".
Shares of AMD closed at $7.40 yesterday.
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