Ultra Clean stock price target lowered to $30 from $32 at TD Cowen

Investing.com - TD Cowen has reduced its price target on Ultra Clean (NASDAQ:UCTT) to $30.00 from $32.00 while maintaining a Buy rating on the stock. The stock, currently trading at $24.98, has seen a significant decline of nearly 30% over the past six months, though InvestingPro analysis suggests the company may be undervalued at current levels.

The firm identified domestic China customer sales as the most significant near-term risk for Ultra Clean, noting that investors are reluctant to pay a premium for China revenues despite their positive impact on estimates. With a beta of 2.07, the stock’s high volatility reflects these market concerns.

TD Cowen expressed confidence in management’s strategic direction, specifically highlighting operational improvements and efforts to secure additional design wins as positive developments.

The analyst values Ultra Clean using a sum-of-the-parts methodology, applying a 17x multiple to the products business and a 20x multiple to the services division, resulting in a blended 17x multiple.

The new $30 price target is based on this blended multiple applied to TD Cowen’s calendar year 2026 earnings per share estimate of $1.75, which was revised down from the previous estimate of $2.00.

In other recent news, Ultra Clean Holdings Inc reported its second-quarter earnings for 2025, revealing an earnings per share (EPS) of $0.27, which aligned with analysts’ expectations. The company exceeded revenue forecasts by reporting $518.8 million, surpassing the projected $500.83 million. This strong performance was primarily driven by its business operations in China. Following these results, Needham raised its price target for Ultra Clean from $26 to $30, maintaining a Buy rating on the stock. These developments indicate positive momentum for Ultra Clean, as highlighted by the earnings call and analyst updates.

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