Wedbush Cuts Price Target on AMD (AMD) Following New Q3 Guidance, Notes Buy on Pullback
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Price: $4.02 -1.95%
Rating Summary:
5 Buy, 15 Hold, 5 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 25 | New: 24
Rating Summary:
5 Buy, 15 Hold, 5 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 25 | New: 24
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Wedbush is reiterating its Outperform rating on shares of AMD (NYSE: AMD), but is lowering its price target from $10 to $9.
The company cut its third quarter revenue guidance from $1.7-$1.76 billion to $1.63-$1.66 billion. AMD's new guidance is well below the consensus of $1.72 billion and the firms previous estimate of $1.71 billion.
Management noted that the downside was largely due to the supply of Llano which was constrained at GlobalFoundries’ fab in Dresden due to 32nm yield, ramp, and manufacturing issues.
AMD also reduced its Q3 gross margin guidance from 47 percent to a range of 44-45 percent to reflect a lower-than-expected supply of Llano.
An analyst at Wedbush comments, "While yield and manufacturing issues are temporarily impacting the near-term, we believe our long-term investment thesis remains intact. With the stock trading near its 52-week low, we see limited downside risk and recommend investors with a LT horizon buy AMD on today’s pullback."
To go inline with the company's new guidance, Wedbush is reducing its Q3 revenue and EPS estimates from $1.71 billion and $0.18 to $1.65 billion and $0.10. The firm is also cutting its 2011 and 2012 EPS estimates from $0.60 and $0.89 to $0.41 and $0.58 to go inline with market trends. They are also lowering their revenue estimates for the two years slightly to $6.52 billion and $6.66 billion.
For more ratings news on AMD click here and for the rating history of AMD click here.
Shares of AMD closed at $6.15 yesterday, with a 52 week range of $5.60-$9.58.
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The company cut its third quarter revenue guidance from $1.7-$1.76 billion to $1.63-$1.66 billion. AMD's new guidance is well below the consensus of $1.72 billion and the firms previous estimate of $1.71 billion.
Management noted that the downside was largely due to the supply of Llano which was constrained at GlobalFoundries’ fab in Dresden due to 32nm yield, ramp, and manufacturing issues.
AMD also reduced its Q3 gross margin guidance from 47 percent to a range of 44-45 percent to reflect a lower-than-expected supply of Llano.
An analyst at Wedbush comments, "While yield and manufacturing issues are temporarily impacting the near-term, we believe our long-term investment thesis remains intact. With the stock trading near its 52-week low, we see limited downside risk and recommend investors with a LT horizon buy AMD on today’s pullback."
To go inline with the company's new guidance, Wedbush is reducing its Q3 revenue and EPS estimates from $1.71 billion and $0.18 to $1.65 billion and $0.10. The firm is also cutting its 2011 and 2012 EPS estimates from $0.60 and $0.89 to $0.41 and $0.58 to go inline with market trends. They are also lowering their revenue estimates for the two years slightly to $6.52 billion and $6.66 billion.
For more ratings news on AMD click here and for the rating history of AMD click here.
Shares of AMD closed at $6.15 yesterday, with a 52 week range of $5.60-$9.58.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
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