Stifel cuts Advanced Energy price target to $130, keeps Buy rating

Published 01/05/2025, 10:52
Stifel cuts Advanced Energy price target to $130, keeps Buy rating

On Thursday, Stifel analysts adjusted their financial outlook for Advanced Energy Industries (NASDAQ:AEIS), reducing the price target to $130 from $135, while continuing to endorse the stock with a Buy rating. The revision follows Advanced Energy’s recently reported first-quarter results and guidance for the second quarter, which surpassed market expectations. According to InvestingPro data, analyst targets for AEIS range from $98 to $145, with the stock currently trading at $97.41. InvestingPro analysis suggests the stock is trading above its Fair Value.

Advanced Energy, known for its power conversion solutions, demonstrated robust sales in the semiconductor capital equipment (semicap) sector, sustaining high levels during the first quarter that ended in March. Additionally, the company experienced a surge in datacenter growth due to increased demand from hyperscale clients, which more than compensated for weaker sales in the industrial and medical (I&M) segment.

Looking ahead to the second quarter ending in June, Advanced Energy anticipates a positive turn in the I&M sector, with datacenter growth once again leading the charge. A key factor contributing to the company’s optimistic outlook is the accelerated adoption of its novel plasma power products. These products are expected to make a significant impact in the second half of the year, aiding in driving the semicap business’s growth projections upward by over 10%.

Stifel’s analysis suggests that these developments serve as an early validation of their hypothesis that Advanced Energy will gain market share. Furthermore, the company has formulated strategies to counteract the impact of tariffs, with expectations of continued gross margin expansion in the latter half of the year.

Despite the adjustment in the price target, which reflects a broader decline in technology sector valuations, Stifel’s analysts reaffirm their positive stance on Advanced Energy’s stock, signaling confidence in the company’s growth trajectory and market position. The company maintains a strong financial position with a current ratio of 4.42 and moderate debt levels, supporting its growth initiatives. For detailed valuation metrics and comprehensive analysis, investors can access the full Pro Research Report available on InvestingPro.

In other recent news, Advanced Energy Industries Inc. reported impressive financial results for the first quarter of 2025, exceeding analysts’ expectations for both earnings per share and revenue. The company achieved an EPS of $1.23, surpassing the anticipated $0.99, while revenue reached $405 million, outperforming the projected $392.36 million. This strong performance was driven by robust demand in the semiconductor and data center markets, with revenue growing 24% year-over-year. Additionally, Advanced Energy is closing its last factory in China as part of efforts to improve operational efficiency. The company projects revenue between $400 million and $440 million for the second quarter of 2025, with a gross margin of approximately 38%. In analyst updates, Stifel and Seaport Research have shown interest in the company’s market share gains, particularly in semiconductor etch technologies. Despite these positive developments, Advanced Energy faces ongoing challenges, including global supply chain disruptions and potential impacts from tariffs.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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