Selected stock price target news of the day - January 23rd, 2024

By: Matthew Otto

AMD Faces Uncertainty Amid Surging Demand for AI GPUs

The demand for graphics processing units, particularly those tailored for artificial intelligence applications, has driven gains for AMD, with a surge of nearly 130% in 2023. Investors are optimistic about the potential gains AMD’s AI-oriented GPUs could achieve, potentially challenging industry leader Nvidia. However, Northland Capital Markets analyst Gus Richard has tempered these expectations, expressing uncertainty about AMD’s future trajectory. Citing what he perceives as irrational exuberance among investors, Richard emphasizes distortions in overall demand signals, with Nvidia acting as an effective sole source for AI chips, leading to supply-demand imbalances and instances of customers double ordering. Additionally, potential challenges, such as recent U.S. moves to restrict certain chip exports to China, are noted as factors that could weigh on future growth.

Despite the optimistic outlook for AI chip revenue, Richard downgrades AMD’s stock to a “heck if we know” rating, equivalent to a hold or market perform. He suggests that, even if AMD were to achieve substantial AI chip sales, doubling to $16 billion by 2027, maintaining a 13% market share, the company would need continued robust investments in research and development to stay competitive with Nvidia. Richard believes that the current stock price already factors in expectations of reaching $45 billion in total revenue by 2027.

Analysts Mixed Ratings and Price Targets

Cantor Fitzgerald analyst C J Muse initiated an Overweight rating and a Price Target of $190.
Northland Capital Markets analyst Gus Richard downgraded from Outperform to Market Perform.
Wedbush analyst Matt Bryson raised the Price Target to $200.

Which Analyst has the best track record to show on AMD?

Analyst Timothy Arcuri (UBS) currently has the highest performing score on AMD with 5/5 (100%) price target fulfillment ratio. His price targets carry an average of $27.17 (25.20%) potential upside. Advanced Micro Devices stock price reaches these price targets on average within 95 days.

ADM Faces Investor Concerns and Market Turbulence

Archer-Daniels-Midland faced a setback as it announced a revision to its 2023 profit target. The company’s Chief Financial Officer, Vikram Luthar, is presently on administrative leave pending an investigation into accounting practices at ADM’s nutrition unit, triggered by a request for information from the US Securities and Exchange Commission. This development resulted in a market reaction, with ADM’s plummeting by nearly 24%, equating to a staggering $8.8 billion reduction in market value.

ADM’s nutrition business, a key focus of the company’s diversification strategy, encountered challenges as its operating earnings for 2023 shrank by approximately 20%, following a period of more modest growth at under 7% in 2022. Despite previous successful acquisitions, including the $3.1 billion purchase of Wild Flavors GmbH in 2014, the nutrition segment struggled to meet the company’s optimistic projections.

Analysts Downgrades and Adjust Price Targets

Goldman Sachs analyst Adam Samuelson maintained a Neutral rating and lowered the price target from $90 to $67.
Stifel analyst Vincent Anderson downgraded from Buy to Hold and the price target from $116 to $56.
Barclays analyst Benjamin Theurer downgraded from Overweight to Underweight and announced a $60 price target.
Roth MKM analyst Brian Wright downgraded from Buy to Neutral and the price target from $98 to $66.

Which Analyst has the best track record to show on ADM?

Analyst Vincent Andrews (MORGAN STANLEY) currently has the highest performing score on ADM with 7/8 (87.5%) price target fulfillment ratio. His price targets carry an average of $5.02 (7.07%) potential upside. Archer-Daniels-Midland stock price reaches these price targets on average within 150 days.

D.R. Horton’s Mixed Q1 Results Prompt Market Concerns

D.R. Horton unveils its 2024 fiscal first-quarter results. While the company’s quarterly revenue of $7.73 billion surpassed expectations of $7.56 billion, its earnings per share fell short at $2.82, compared to the Wall Street forecast of $2.87. Analysts from Wells Fargo, Sam Reid and Zachary Fadem, anticipate 88,300 deliveries in 2024, slightly exceeding the consensus call of 88,100. However, some analysts, including Jay McCanless and Brian Violino from Wedbush, point to a notable order miss and a gross margin shortfall compared to consensus forecasts, highlighting fluctuating mortgage rates during the builder’s first quarter as potential contributing factors.

The company has adjusted its 2024 guidance, projecting revenue in the range of $36 billion to $37.3 billion. The broader impact on the industry is reflected in a 2.25% decline in the iShares U.S. Home Construction exchange-traded fund in premarket trading.

Mixed Analyst Signals on D.R. Horton

Wedbush analyst Jay McCanless reiterated Neutral rating and a $115 price target.
Seaport Global analyst Kenneth Zener downgraded from Buy to Neutral.

Which Analyst has the best track record to show on DHI?

Analyst Anthony Pettinari (CITI) currently has the highest performing score on DHI with 10/10 (100%) price target fulfillment ratio. His price targets carry an average of $22.4 (19.05%) potential upside. D.R. Horton stock price reaches these price targets on average within 140 days.