Canaccord Genuity Maintained Hold on Advanced Micro Devices (AMD) Following Investor Meetings
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Canaccord Genuity maintained a Hold rating and $2.00 price target on Advanced Micro Devices (NASDAQ: AMD) following a day of investor meetings in Toronto. Analyst Matthew Ramsay came away from the meetings with concerns about the overall macro environment near-term but intrigued by AMD's long-term innovative product roadmaps. Management guided operating expenses at $340M, or down ~20% Y/Y. Ramsay expects further declines into 2016.
Ramsay commented, "We hosted a day of investor meetings in Toronto with Matt Skynner, Corporate VP & GM of AMD's Computing and Graphics business; Wissam Jabre, Corporate VP of Finance; and Liz Morali from IR and walked away still with concerns about the overall macro environment near-term but intrigued by AMD's long-term innovative product roadmaps for both GPU and x86 cores. Overall, we believe AMD’s diversification strategy continues to show gradual progress and a refreshed roadmap could position the company for more defensible long-term sales. However, AMD has not been able to stem the decline of its Computing & Graphics business - down ~46% Y/Y in 1H/15 – especially as the PC market has weakened following a stronger 2014. While yet another restructuring, the SeaMicro business exit, and more reliance on NRE-funded R&D should lower operating expenses to manage gross cash within the target range as new products launch, we worry PC headwinds will persist through 2016 and AMD's most important new products will likely not ramp for another 18 months. Further, competitors Intel and NVIDIA continue to innovate on their roadmaps and maintain scale advantages. Despite believing in the leadership under AMD’s new CEO Lisa Su, we continue to wait for tangible signs of core business stability or new product inflection before becoming more constructive on shares. Maintain HOLD, $2.00 PT."
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 $1.85 yesterday.
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