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On Friday, Needham analysts adjusted their outlook on MKS Instruments (NASDAQ:MKSI), reducing the price target from $156.00 to $145.00, yet reaffirming a Buy rating on the stock. The revision comes amid concerns regarding the future strength of Wafer Fabrication Equipment (WFE) and broader macroeconomic issues that could impact the company's Specialty Industrial business. InvestingPro data shows analyst targets ranging from $110 to $160, with the stock currently trading near its 52-week low of $97.54.
MKS Instruments reported a robust fourth quarter, with revenue and earnings per share (EPS) surpassing both the guidance's midpoint and market consensus. Despite this strong performance, the company's guidance for first-quarter EPS fell short of expectations, factoring in increased operating expenses and a higher tax rate. Nevertheless, MKS highlighted positive developments such as rising demand in NAND within the Semiconductor segment and growth in equipment and chemistry for Advanced Packaging (NYSE:PKG) in the Electronics & Packaging division.
Analysts noted that while operating expenses are anticipated to stabilize after the first quarter, MKS Instruments is prioritizing debt repayment. The company maintains a healthy current ratio of 3.19, indicating strong liquidity, and has consistently paid dividends for 15 consecutive years. The reassessment of the price target reflects a more cautious stance for the company's prospects in 2025, but the analysts maintain that their projections for the current and following year remain conservative. They also emphasized the stock's favorable risk-reward ratio at its current price level, supporting their decision to uphold the Buy rating.
In other recent news, MKS Instruments has seen a series of adjustments to its stock price targets by various financial analysts, following its recent earnings and revenue results. JPMorgan cut the company's stock price target to $135, maintaining an Overweight rating, citing the company's stronger than expected performance in the December quarter. However, the analyst also noted a potential earnings miss due to lower gross margin and increased operating expenses.
Goldman Sachs slightly increased MKS Instruments' stock price target to $129, maintaining a Neutral rating, following a tepid earnings forecast for the first quarter of 2025. The company's non-GAAP EPS guidance was notably below consensus, leading to a downward revision of non-GAAP EPS estimates for 2025-2026 by Goldman Sachs.
Mizuho (NYSE:MFG) Securities, on the other hand, raised the company's stock price target to $130, maintaining an Outperform rating. This followed MKS Instruments' strong financial performance for the December quarter and the company's guidance for the March quarter.
Morgan Stanley (NYSE:MS) revised its price target for MKS Instruments, decreasing it to $147 while continuing with an Overweight rating. This followed an analysis of the company's financial outlook and market position, tempered by an increase in operating expenses.
Lastly, Cantor Fitzgerald maintained an Overweight rating on MKS Instruments with a steadfast price target of $140. The firm acknowledged the company's solid fourth-quarter results, which surpassed both their own and consensus estimates, but noted a puzzling first-quarter guidance.
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