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Investing.com - JPMorgan downgraded Teradyne (NASDAQ:TER) from Overweight to Neutral on Thursday, while raising its price target to $102.00 from $88.00. The company, currently trading at $92.76 with a market cap of $14.9 billion, appears fairly valued according to InvestingPro analysis.
The downgrade comes as JPMorgan cites concerns about likely pauses in capital spending from Teradyne’s customers and a sluggish cyclical recovery in the semiconductor testing equipment market. This sentiment aligns with broader analyst concerns, as InvestingPro data shows seven analysts have recently revised their earnings expectations downward.
The investment bank noted that continued macroeconomic uncertainty is pressuring customer decisions on capital projects for semiconductor equipment, which creates challenges for the outlook of semiconductor test equipment needed to support new customer initiatives.
JPMorgan expects these customer decision pauses to drive further reductions in Teradyne’s revenue and earnings estimates in the medium term, even as the delayed cyclical recovery in the smartphone market and Mobility SOC continues to produce underwhelming results relative to investor expectations.
The firm lowered its earnings forecasts for Teradyne to $3.00 from $3.45 for 2025 and to $4.00 from $4.20 for 2026.
In other recent news, Teradyne Inc . reported its first-quarter 2025 earnings, surpassing expectations with an earnings per share (EPS) of $0.75, compared to the forecasted $0.62. The company also exceeded revenue projections, reaching $686 million, driven by strong performance in its semiconductor testing division. Despite these positive results, Teradyne has provided guidance for the second quarter, projecting revenue between $610 million and $680 million, which represents a potential decline from the first quarter.
Goldman Sachs recently initiated coverage on Teradyne with a Sell rating, citing concerns over the company’s growth prospects, particularly in its Robotics and Mobile segments. The firm also expressed skepticism about Teradyne’s long-term growth forecasts, suggesting that market expectations might be overly optimistic. Meanwhile, Stifel analysts have maintained their Hold rating on Teradyne, noting that the company’s first-quarter results aligned with their projections.
Additionally, Teradyne announced the appointment of two semiconductor industry veterans, Drew Henry and Dr. Necip Sayiner, to its Board of Directors as part of a multi-year refreshment process. These appointments are aimed at enhancing the company’s strategic direction. Teradyne’s shareholders have also approved an amended Equity and Cash Compensation Incentive Plan, reflecting updates to governance practices.
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