How are energy investors positioned?
Investing.com - Needham has raised its price target on Allegro (WA:ALEP) MicroSystems (NASDAQ:ALGM) to $37.00 from $25.00 while maintaining a Buy rating on the semiconductor company. The stock has shown impressive momentum, with a 30% gain over the past six months and a year-to-date return of nearly 44%, according to InvestingPro data.
The price target increase follows Allegro’s quarterly results that showed a slight revenue and earnings per share beat, driven by growth in both Automotive and Industrial segments.
Needham noted that orders, bookings, and backlog are all tracking better, confirming that a cyclical recovery in the semiconductor sector is underway for the company.
In the Automotive segment, growth was primarily driven by E-mobility, which increased 16% quarter-over-quarter as dollar content in Advanced Driver Assistance Systems (ADAS) features continues to rise.
The Industrial segment grew 11% quarter-over-quarter and 50% year-over-year, driven by strategic growth areas including data center and robotics, while the company’s gross margin outperformance was attributed to lower costs flowing through the balance sheet.
In other recent news, Allegro MicroSystems reported a strong start to its fiscal year 2026, with both earnings and revenue surpassing analyst forecasts. The company achieved earnings per share of $0.09, exceeding the expected $0.08. Revenue reached $203.4 million, surpassing expectations by 2.77%. Additionally, Allegro guided September quarter revenue to approximately $210 million, slightly above the consensus estimate of $208 million. Mizuho (NYSE:MFG), maintaining an Outperform rating, raised its price target for Allegro MicroSystems from $37.00 to $40.00, attributing the increase to growth in the E-Mobility and Data Center segments. These developments reflect Allegro’s robust performance and positive outlook in the market.
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