Susquehanna Upgrades Advanced Energy Industries (AEIS) to Positive

Susquehanna analyst Mehdi Hosseini upgraded Advanced Energy Industries (NASDAQ: AEIS) from Neutral to Positive with a price target of $82.00 (from $45.00).

The analyst commented, "Consistent with our AMAT upgrade from this morning (LINK), we are also upgrading the shares of Advanced Energy (AE). AMAT accounts for ~1/3 of AE's overall revenues. Thus, with AMAT scoring major wins against key Deposition and Etch competitors like TEL, we expect AE to be one of the key beneficiaries, especially since TEL procures (sub-components) from Japan while AMAT relies on key sub-component vendors like AE & MKSI. Our updated 2020 estimates are based on AE's core semi business unit, 50-55% of total revenues, growing by 54%, which follows two consecutive Y/Y declines: 40% decline in 2019 and 4% decline in 2018. Our updated 2020 EPS estimates of $4.95 is up from the prior $4.50 and compares to the current consensus of $4.58. Our updated PT of $82 is also based on 15x 2020 EPS plus net cash (assuming the company will not in the near future pursue sizable acquisitions). We are increasing our PE valuation multiple to account for acceleration in the semi related revenue growth rate due to AEIS’s largest customer, AMAT, gaining customer share."

For an analyst ratings summary and ratings history on Advanced Energy Industries click here. For more ratings news on Advanced Energy Industries click here.

Shares of Advanced Energy Industries closed at $48.53 yesterday.

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