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On Monday, Cantor Fitzgerald adjusted its outlook on Teradyne shares (NASDAQ:TER), currently trading at $77.12, reducing the price target from $110.00 to $90.00, while maintaining an Overweight rating on the stock. The firm’s analysts cited a deteriorating macroeconomic environment since Teradyne’s guidance cut in mid-March, suggesting the possibility of another reduction to the company’s CY25 revenue forecasts. They anticipate earnings per share (EPS) for CY25 to be in the range of $2.50-2.75, compared to the consensus estimate of $3.31. According to InvestingPro data, the company maintains strong financial health with a current ratio of 2.91 and minimal debt-to-equity of just 0.03.
Teradyne’s stock has experienced a significant pullback, dropping approximately 55% from its 52-week high of $163.21, which is a sharper decline than the SOX index’s 35% fall. InvestingPro analysis shows the stock’s notable volatility with a beta of 1.65, while maintaining a 10.47% return over the past week despite a -30.58% six-month decline. The analysts expressed concern over further potential cuts to financial forecasts and an increasingly competitive market. They indicated that the stock’s downside risk could reach the low $60s, based on a 25x trough multiple applied to the downgraded CY25E EPS.
The revised price target of $90 reflects a more conservative outlook into CY26, with EPS projections now leaning towards a ~$4.50 level. This is a decrease from the management’s previous guidance, which was at the lower end of the $5.50-7.50 range, and below the current consensus of $4.93. The company maintains strong profitability with a 58.48% gross margin and 20% return on equity. Despite the near-term challenges anticipated for the stock, Cantor Fitzgerald reaffirmed its Overweight rating, recognizing the 12-month forward opportunity for Teradyne.
In their commentary, the analysts remarked that it is "Too Late to Downgrade, Too Early to Get Excited" regarding Teradyne’s stock, indicating that while the current situation does not warrant a downgrade, enthusiasm for a rebound may be premature in light of the expected challenges. The firm’s stance reflects caution due to the potential for further downward revisions and a tough competitive landscape that could impact Teradyne’s performance in the near term. For deeper insights into Teradyne’s valuation and growth prospects, InvestingPro subscribers can access comprehensive research reports with detailed analysis of the company’s financial health, competitive position, and growth potential.
In other recent news, Teradyne has seen a series of adjustments from various financial analysts. KeyBanc Capital Markets downgraded Teradyne’s stock rating from Overweight to Sector Weight, citing global trade uncertainties and limited visibility in the current market environment. Meanwhile, Morgan Stanley (NYSE:MS) lowered its price target for Teradyne from $81.00 to $69.00, maintaining an Underweight rating due to a slower-than-expected recovery in key markets such as automotive and industrial. Northland Securities also revised their price target down to $105 from $140, while maintaining an Outperform rating, noting concerns over tariff uncertainties affecting near-term performance.
Additionally, TD Cowen decreased their price target for Teradyne from $135.00 to $110.00, but kept a Buy rating, highlighting challenges in the semiconductor testing segment and export restrictions impacting China memory. UBS adjusted its price target from $155 to $130, maintaining a Buy rating, as the company faces near-term challenges in semiconductor testing due to new export controls. Despite these challenges, UBS remains optimistic about Teradyne’s longer-term prospects. Overall, analysts have shown varied outlooks on Teradyne, with some expressing confidence in the company’s long-term growth potential despite current headwinds.
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