AMD (AMD) Price Target Lowered at Goldman Sachs; Analyst Maintains Sell Rating

Goldman Sachs maintained a Sell rating on AMD (NYSE: AMD) and lowered its price target to $2.25 (from $2.50). Comments follow Q3 results. Analyst James Covello said the miss indicates magnitude of share loss and structural challenges.

"AMD attributed the 4Q sales shortfall to weakness in consumer PCs and a decline in semi-custom revenue into the gaming market. We believe the magnitude of the miss indicates the degree of market share pressure that AMD is facing in consumer PCs from Intel, consistent with our conversations in Asia this month and Intel’s relatively stronger 4Q outlook. In particular, we believe Intel has intensified its efforts to take share at the low end with new products and OEM rebates," said Covello.

"Over the medium term, AMD’s planned restructuring will help protect earnings power; however, it could further handicap its efforts to be competitive in PCs and discrete graphics longer term. Lastly, we view new details on semi-custom opportunities (two wins comprising a $1 bn opportunity over three years) as an incremental positive but these wins have minimal impact on 2015 fundamentals. We lower our 2014/2015 EPS to $0.07/$0.15 from $0.15/$0.20; 2016 remains at $0.25 on lower opex," he added.

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 $2.64 yesterday.

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