Teradyne stock price target cut to $110 by TD Cowen

On Wednesday, TD Cowen’s analysts revised their outlook on Teradyne (NASDAQ:TER), a company that specializes in automated test equipment. The firm decreased the price target from $135.00 to $110.00 but maintained a Buy rating on the stock. The adjustment follows Teradyne’s analyst day, which marked the first such event in nearly two decades. According to InvestingPro data, the stock is currently trading near its 52-week low of $82.98, having declined about 21% in the past week alone. InvestingPro analysis suggests the stock is currently undervalued, with 14 additional ProTips available to subscribers.

During the analyst day, Teradyne updated its financial guidance, signaling a downturn in the June quarter with an expected 5% quarter-over-quarter decrease, contrasting with the previously anticipated 7.5% increase. Despite near-term challenges, InvestingPro data shows the company maintains strong fundamentals with a healthy current ratio of 2.91 and operates with moderate debt levels. The change is attributed primarily to challenges within the semiconductor testing segment, including tariff impacts on System-on-Chip testing that led to deferrals and capital expenditure reviews from customers, as well as export restrictions affecting China memory.

For the March quarter, Teradyne’s guidance remained unchanged. However, for the June quarter, the company now anticipates results to be flat or down by as much as 10% sequentially, a significant shift from the earlier forecast of 5-10% growth. Additionally, the full-year 2025 revenue growth projection has been scaled back to 5-10% year-over-year from the previous mid-teens growth expectation. This revised guidance implies a substantial second-half recovery, with an estimated increase of roughly 30%.

The analyst from TD Cowen raised the question of whether Teradyne could be an early indicator of broader issues within the back-end semiconductor sector, where there is a high degree of equipment re-use. This concern reflects the potential for Teradyne’s current challenges to be reflective of wider market conditions.

Despite the lowered expectations for the upcoming quarters, TD Cowen’s continued Buy rating suggests a positive long-term outlook for Teradyne’s stock. The firm’s analysis indicates that while near-term headwinds are evident, the potential for recovery and growth remains.

In other recent news, several financial analysts have revised their outlooks on Teradyne, focusing on the company’s earnings and revenue projections. UBS has reduced its price target for Teradyne to $130, maintaining a Buy rating, as the company faces near-term challenges in semiconductor testing but shows promise in industrial automation. Stifel also adjusted its price target down to $110, keeping a Hold rating, while acknowledging Teradyne’s strategic moves in the AI sector and datacenter-driven co-packaged optics test market. KeyBanc Capital Markets lowered its price target to $140, retaining an Overweight rating, and expressed optimism for Teradyne’s future performance despite potential macroeconomic challenges. Cantor Fitzgerald revised its target to $110, maintaining an Overweight rating, following Teradyne’s Analyst Day, where the company presented a long-term target model but lowered its mid-term financial estimates. Evercore ISI cut its price target to $115, keeping an Outperform rating, citing growth potential driven by AI demand, while remaining cautious about non-compute and robotics segments. These adjustments reflect the analysts’ varied perspectives on Teradyne’s potential amidst current market uncertainties and strategic shifts.

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