Cohu (COHU) PT Lowered to $45 at Needham as Growth Shifts From Handlers to Testers

July 30, 2021 7:26 AM EDT
Get Alerts COHU Hot Sheet
Price: $33.45 -1.56%

Rating Summary:
    8 Buy, 2 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 7 | Down: 15 | New: 24
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Needham & Company analyst Quinn Bolton lowered the price target on Cohu (NASDAQ: COHU) to $45.00 (from $55.00) after the company reported its first earnings post the divestiture of its PCB business. Despite the $14M handler revenue pushout from Q3 to Q4, Cohu's 2H21 revenue guidance is largely in-line but the gross margin guidance suggests that handler revenue will grow in Q3 and further weigh on corporate gross margin, despite the divestiture of PCB business that was margin dilutive.

The analyst reiterated a Buy rating, stating "Looking ahead into 2022, we believe Cohu's growth driver will shift from handlers to testers, as the automotive chip shortage abates and the 5G investment cycle continues. As such, we estimate Cohu's GM will improve next year despite overall revenue (ex PCB) remaining approximately flat. Due to a reset in GM expectations, we are lowering our EPS estimates and PT t o$45, now 15x our CY22 EPS estimate".



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