Sprouts Farmers Market closes $600 million revolving credit facility
On Wednesday, Morgan Stanley (NYSE:MS) analyst Joseph Moore adjusted the price target for Teradyne (NASDAQ:TER) shares, bringing it down from $81.00 to $69.00, while keeping an Underweight rating on the stock. Currently trading at $74.06, the stock sits near its 52-week low of $65.77, having declined over 41% in the past six months. The revision reflects a tempered outlook for the company’s recovery in key markets, including automotive, industrial, and mobile sectors. According to InvestingPro analysis, Teradyne maintains a "GOOD" overall financial health score, suggesting fundamental strength despite market challenges.
Moore’s reassessment comes after Teradyne’s Investor Day and subsequent discussions with competitor Advantest. The new estimates suggest a slower-than-expected rebound for these critical end-markets. As a result, Morgan Stanley’s revenue forecasts for Teradyne in 2025 and 2026 have been reduced by 2% and 3%, respectively, with an even sharper decrease in earnings per share (EPS) expectations of 7% for 2025 and 11% for 2026. For deeper insights into Teradyne’s financial outlook and access to comprehensive valuation models, investors can explore the detailed Pro Research Report available on InvestingPro.
The revised forecasts indicate that Teradyne’s 2025 revenue is now expected to be $2.82 billion with an EPS of $2.87, down from the previous projection of $2.89 billion in revenue and an EPS of $3.08. For 2026, revenue forecasts have been adjusted from $3.28 billion to $3.19 billion, with EPS estimates dropping from $4.26 to $3.81.
In line with the reduced earnings outlook, Morgan Stanley has also lowered the target multiple for Teradyne from 19x to 18x, which is consistent with the valuations of its front-end semiconductor equipment (SPE) peers, excluding KLA. This change in the target multiple is a significant factor contributing to the lowered price target.
Moore highlighted that Teradyne’s performance is highly dependent on its end-markets, which include mobile, automotive and industrial sectors, as well as NAND memory. He suggests that the stock is now considered a "show-me" story, implying that investors will likely need to see concrete signs of earnings improvements or clear evidence of end-market recoveries before the stock can rally again. Despite current market challenges, InvestingPro data shows Teradyne maintains strong fundamentals with a healthy current ratio of 2.91 and minimal debt, while analysts project continued profitability for the current fiscal year.
In other recent news, Teradyne has experienced a series of adjustments in its price targets from various analyst firms, reflecting a cautious outlook amid current market challenges. Northland Securities revised its price target for Teradyne to $105, maintaining an Outperform rating, due to concerns over tariff impacts but expressed optimism about long-term growth driven by the semitest market and industrial automation. Similarly, TD Cowen reduced its price target to $110, while keeping a Buy rating, citing a downturn in the semiconductor testing segment and revised financial guidance for upcoming quarters. UBS also lowered its target to $130, maintaining a Buy rating, as it noted unexpected weakness in the memory segment of semiconductor testing but highlighted increased activity in industrial automation.
Stifel adjusted its price target to $110, maintaining a Hold rating, and pointed to Teradyne’s strategic positioning in the AI sector and entry into the datacenter-driven co-packaged optics test market as potential long-term opportunities. KeyBanc Capital Markets reduced its target to $140, keeping an Overweight rating, with optimism about a future upcycle in the market despite acknowledging potential macroeconomic delays. These recent developments indicate that while Teradyne faces near-term headwinds, analysts remain cautiously optimistic about its long-term prospects, driven by strategic initiatives and market opportunities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.