Canaccord lowered its rating from Buy to Hold and reduced its price target from $4.50 to $2.75 on Advanced Micro Devices, Inc. AMD in a report issued Thursday.
The rating change came after AMD missed quarterly earnings expectations and released news that it will cut 7 percent of its workforce.
Analyst Matthew D. Ramsay believed that “AMD’s diversification strategy remains on track and could position the company for more defensible long-term growth under new CEO Lisa Su, AMD has not been able to stem the decline of their Computing & Graphics business even amidst a stronger PC backdrop.”
Ramsay felt “required to wait for tangible signs of core business stability before recommending AMD shares.”
Despite lower costs, Ramsay reduced “2014/15 non-GAAP EPS estimates from $0.14/$0.25 to $0.07/$0.15” and revenue estimates declined “from $5.81B/$5.98B to $5.51B/$5.43B.”
The $2.75 price target was based on shares trading at roughly 18x the 2015 non-GAAP EPS estimate.
Advanced Micro Devices, Inc. recently traded at $2.72, up 3.03 percent.
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