Susquehanna Remains Neutral on Advanced Micro Devices (AMD) Following 2Q15 Results

Susquehanna maintained a Neutral rating and $2.00 price target on Advanced Micro Devices (NASDAQ: AMD) following 2Q15 results. AMD reported revenue of $942 mln, slightly lower than consensus of $950 mln. EPS was reported at -$0.17, in-line with consensus.

Analyst Chris
Caso commented, "AMD’s report strikes a pattern similar to that which the company has followed over the last four years. After shockingly poor results in 1H, we expect significant opex cuts to follow in order to eliminate the cash burn, and keep AMD out of bankruptcy. But we would argue that the constant declines in R&D spending have likely been a significant contributor to the subsequent revenue cuts. R&D spending is down about 40% since 2011, about the same amount that revenue has declined over that period, indicating the company isn’t getting any higher return on the reduced spending. Unfortunately, we see no other way out of this cycle short of a significant restructuring of their debt. With regard to the equity, we consider the stock to be in no-man’s land – too low to short, but with no compelling thesis to recommend a long position."

For an analyst ratings summary and ratings history on AMD click here. For more ratings news on AMD click here.

Shares of AMD closed at $1.87 yesterday.

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