Oppenheimer upgrades Ichor Holdings stock to Outperform on cyclical recovery

Investing.com - Oppenheimer upgraded Ichor Holdings (NASDAQ:ICHR) from Perform to Outperform on Wednesday, setting a price target of $25.00 for the semiconductor equipment supplier. This target represents a significant 64% upside from the current price of $15.21, with InvestingPro data indicating the stock is currently trading below its Fair Value.

The upgrade comes despite Ichor’s 53% year-to-date stock decline, making it the worst-performing semiconductor equipment stock in 2025, significantly underperforming its top three customers AMAT, LRCX, and ASML, which collectively represent over 80% of Ichor’s revenue. InvestingPro data confirms this poor performance, showing a precise 52.79% YTD decline and a 53.36% drop over the past year, with a volatility measure (Beta) of 1.8.

Oppenheimer noted that after two "hard resets" that were partly market-driven and partly self-inflicted, along with margins at trough levels and a CEO change, the setup for Ichor now appears "asymmetrically positive." This assessment comes as the company struggles with weak gross profit margins of just 11.9%, one of several insights available through InvestingPro’s comprehensive analysis.

The company’s fourth quarter 2025 guidance points to an earnings per share loss of approximately $0.04, but Oppenheimer highlighted that Ichor has nearly $1 billion in revenue and previously earned around $3.50 annually in 2021-2022.

Oppenheimer expects Ichor to benefit from accelerating wafer fab equipment demand driven by artificial intelligence and memory sectors, projecting earnings to improve to $1.35 per share by 2027.

In other recent news, Ichor Holdings reported its third-quarter earnings, showing a mixed performance. The company’s revenue reached $239.3 million, marking a 13% increase compared to the previous year and exceeding the expected $235.14 million. However, earnings per share (EPS) fell short of forecasts, coming in at $0.07 against the anticipated $0.12. Following this, Stifel downgraded Ichor Holdings from Buy to Hold and reduced its price target from $23.00 to $21.00, citing weak earnings primarily due to a decline in non-semiconductor capital equipment revenue. DA Davidson also adjusted its outlook, lowering the price target for Ichor Holdings to $30.00 from $35.00 while maintaining a Buy rating. This revision was attributed to weak fourth-quarter guidance influenced by third-quarter pull-ins from major customers like Applied Materials and Lam Research. These developments highlight the challenges Ichor Holdings faces amid fluctuating market conditions.

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