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Investing.com - Morgan Stanley (NYSE:MS) raised its price target on MKS Instruments (NASDAQ:MKSI) to $112.00 from $100.00 while maintaining an Overweight rating on the stock. The company, currently trading at $104.71, has shown strong momentum with notable returns over the past three months according to InvestingPro data.
The firm increased its fiscal year 2025 estimates for MKS Instruments from $3,657 million in revenue and $6.28 in earnings per share to $3,754 million and $6.51, respectively. For fiscal year 2026, Morgan Stanley now forecasts $3,908 million in revenue and $7.49 in earnings per share, up from previous estimates of $3,781 million and $7.17. With the company’s next earnings report due on August 6, InvestingPro analysis indicates the stock is trading at a low P/E relative to its near-term earnings growth, with a PEG ratio of 0.27.
The revised estimates primarily reflect changes in the semiconductor segment, where Morgan Stanley updated its wafer fabrication equipment (WFE) forecasts. Despite the increases, the firm’s earnings per share forecasts remain 4% below consensus for fiscal year 2025 and 8% below for fiscal year 2026.
Morgan Stanley expects MKS Instruments to outperform the broader WFE market in 2025-2026, projecting semiconductor growth of 14% and 6% compared to WFE growth of 6% and 1% for those years.
The firm also raised its target multiple from 14x to 15x, representing a 25% discount to front-end semiconductor equipment manufacturers compared to the 5-year average discount of 10%.
In other recent news, MKS Instruments has announced several notable developments. The company declared a quarterly cash dividend of $0.22 per share, scheduled for distribution on June 6, 2025. This decision reflects MKS Instruments’ ongoing commitment to returning value to its shareholders. Meanwhile, TD Cowen maintained its Buy rating for MKS Instruments, with a price target of $120, emphasizing the company’s strong position to benefit from long-term growth trends in the semiconductor industry. In contrast, Goldman Sachs initiated coverage with a Sell rating, citing concerns over the company’s growth prospects within the semiconductor sector. Furthermore, MKS Instruments received shareholder approval to rebrand as MKS Inc., effective May 16, 2025, to better reflect its expanded offerings beyond industrial instruments. The company also announced executive leadership changes, with James A. Schreiner and David P. Henry taking on new roles within the organization. These developments highlight MKS Instruments’ strategic maneuvers to navigate the evolving landscape of the technology sector.
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