Bank of America just raised its EUR/USD forecast
On Tuesday, KeyBanc Capital Markets adjusted its price target for Entegris Inc (NASDAQ:ENTG), a leading provider of specialty chemicals and advanced materials solutions for the microelectronics industry. The firm lowered its price target on the stock to $154 from $164 while retaining an Overweight rating.
The reduction in price target comes as Entegris reported a weaker second half of the year than expected, primarily due to reduced demand in 3D NAND and mainstream logic sectors. Despite the industry's challenges and repeated downward revisions of growth expectations, Entegris has demonstrated resilience. The company achieved a 7% organic sales growth in the third quarter and is expected to outperform its end markets by approximately 300 basis points in 2024.
Entegris is anticipated to accelerate its market outgrowth in 2025, with projections of 500-600 basis points, benefiting from advanced logic node transitions and initial filter sales starting in the fourth quarter of 2024. The company's recent achievements include process of record wins in molybdenum, signaling potential for additional business in 2025. These wins are attributed to Entegris' expertise in various adjacent areas, such as deposition and delivery systems.
Despite the softer outlook leading to a reduced price target, KeyBanc holds a positive view on Entegris. The firm highlights the stock's trading at 26.6 times the estimated earnings per share for 2025, considering it one of the best risk/reward opportunities in its coverage. KeyBanc's stance on Entegris remains confident, reiterating the Overweight rating while adjusting the price target in response to market conditions.
In other recent news, Entegris Inc. (NASDAQ:ENTG) has experienced some significant developments. BMO Capital Markets and Needham & Company both adjusted their price targets for the company, with BMO reducing it to $135 from $145 and Needham cutting it to $120 from $135. Both firms, however, maintained positive ratings on the stock, with BMO keeping an Outperform rating and Needham maintaining a Buy rating. The revisions came after Entegris reported weaker than expected fourth-quarter outlook and a decrease in its third-quarter 2024 earnings.
These recent developments also include Entegris' plans to ramp up production at new facilities in Taiwan and Colorado by late 2025. The company's revenue increased by 7% year-on-year, reaching $808 million, primarily due to a 14% revenue increase in the Materials Solutions division. Despite a reduction in its 2024 revenue outlook by approximately $85 million, Entegris anticipates industry growth of 1% to 2% in 2025 and aims to outperform the industry by three to six points.
InvestingPro Insights
To complement KeyBanc's analysis, recent data from InvestingPro offers additional context on Entegris' financial position. The company's market capitalization stands at $15.26 billion, reflecting its significant presence in the microelectronics materials sector. Despite the industry headwinds mentioned in the article, Entegris maintains a strong gross profit margin of 44.82% for the last twelve months as of Q3 2024, indicating resilient pricing power and operational efficiency.
InvestingPro Tips highlight that Entegris is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.88. This suggests that the stock may be undervalued considering its growth prospects, aligning with KeyBanc's view of Entegris as an attractive risk/reward opportunity. Additionally, the company's liquid assets exceed short-term obligations, pointing to a solid financial foundation that could support its growth initiatives in advanced logic node transitions and filter sales.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Entegris, providing a deeper understanding of the company's financial health and market position.
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