Nucor earnings beat by $0.08, revenue fell short of estimates
On Thursday, Morgan Stanley (NYSE:MS) analyst Joseph Moore revised the price target for Teradyne stock (NASDAQ:TER), dropping it to $112 from the previous $117, while maintaining an Underweight rating on the shares. According to InvestingPro data, Teradyne is currently trading at $115.08, with analysis indicating the stock is slightly overvalued. Moore’s analysis suggests that although there is a more balanced risk-reward ratio compared to the time of the previous downgrade, the lack of a clear reset in expectations makes it challenging to foresee a scenario where the company outperforms and raises forecasts.
Moore’s forecast for Teradyne anticipates a 13.3% revenue growth by 2026, driven by cyclical recoveries in key areas such as smartphones, NAND, and analog. Despite this optimism, the firm’s estimates for the company’s earnings per share (EPS) in fiscal year 2026 are now 21% lower than the consensus on the street. InvestingPro analysis reveals the company trades at a P/E ratio of 35.75x, which is considered high relative to near-term earnings growth. According to Moore, the anticipated cyclical recovery appears to be already factored into the current share price. For deeper insights into Teradyne’s valuation metrics and growth potential, investors can access the comprehensive Pro Research Report available on InvestingPro.
The analyst has applied a 23x multiple to the revised fiscal year 2026 EPS estimate, which stands at $4.87. This multiple includes a 20% premium over the company’s front-end peers. However, this premium is a reduction from the historical average of 40%, reflecting Teradyne’s diminishing market share.
The adjustment in the price target to $112 is a direct result of the new EPS estimate for fiscal year 2026. Despite the potential for growth in Teradyne’s market sectors, Morgan Stanley’s analysis suggests that the company’s stock may not offer the upside that investors are looking for, leading to the decision to maintain the Underweight rating.
In other recent news, Teradyne, a leader in automated test equipment, reported strong fourth-quarter earnings, surpassing both Stifel’s and consensus estimates with revenues of $737 million and non-GAAP earnings per share at $0.90. The company’s Semiconductor test revenue notably outperformed expectations, reaching $542 million. However, Teradyne’s Robotics division revenue fell short of the expected $137 million. For the first quarter, Teradyne provided revenue and non-GAAP EPS guidance ranging from $660 million to $700 million and $0.58 to $0.68, respectively, which is in line or below Stifel’s and the consensus estimate.
A significant development was the announcement that Ford (NYSE:F) Tamer, a member of Teradyne’s Board of Directors, will not stand for re-election at the upcoming annual shareholders meeting in 2025 due to his recent appointment as CEO of Lattice (OTC:LTTC) Semiconductor Corporation.
The company has been the focus of several analysts recently. Stifel and Cantor Fitzgerald maintained their Hold and Overweight ratings on Teradyne stock respectively, with price targets of $125 and $160. Morgan Stanley downgraded Teradyne’s stock to Underweight, citing its diminishing market share and competition from Advantest. However, both Northland Securities and JPMorgan upgraded Teradyne’s stock outlook, expressing confidence in the company’s growth potential.
These recent developments reflect a dynamic period for Teradyne as it navigates market challenges and capitalizes on growth opportunities. The company’s revenue growth is anticipated to accelerate, with revenues predicted to reach approximately $4.4 billion in 2026.
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