S&P 500 falls as traders turn sour on tech
Investing.com - UBS has reiterated its Buy rating and $58.00 price target on Cognex (NASDAQ:CGNX), viewing yesterday’s stock correction as temporary and reflective of rising bullish sentiment since second-quarter results.
The machine vision company’s shares had rallied 21% after second-quarter results and gained 40% in total until the recent pullback, according to UBS. The investment firm maintains its thesis that Cognex can double its earnings per share from the 2024 base of $0.73.
UBS sees substantial growth runway in Cognex’s strong areas like Logistics and Consumer Electronics, which it expects to persist and accelerate in 2026, while weaker segments including general industrial and automotive should return to growth later in 2026 or 2027.
The firm believes the combination of cost discipline, commercial investments, and volume leverage should support incremental margins exceeding 50% for Cognex. UBS notes these factors support its continued bullish stance on the stock.
UBS expressed no concern about Cognex’s guidance for slower year-over-year growth in the fourth quarter, attributing this to challenging year-over-year comparisons in Logistics, where a large e-commerce customer had pulled forward some spending, and the seasonal pattern of Consumer Electronics being less concentrated in the fourth quarter.
In other recent news, Cognex Corporation reported strong earnings for the third quarter of 2025, surpassing analyst expectations. The company delivered an adjusted earnings per share of $0.33, beating the forecast of $0.29. Revenue for the quarter reached $277 million, exceeding the anticipated $261.79 million. Despite these positive earnings results, Cognex’s stock experienced a decline, reflecting investor concerns over management’s preliminary 2026 outlook. Additionally, KeyBanc has maintained its Overweight rating for Cognex with a price target of $50.00. The decision to uphold this rating comes despite the stock’s underperformance after the earnings announcement. These developments highlight a mixed sentiment among investors and analysts regarding the company’s future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.