Cognex (CGNX – Research Report), the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Joe Ritchie from Goldman Sachs remains neutral on the stock and has a $37.00 price target.
Joe Ritchie has given his Sell rating to Cognex Corp. (CGNX) due to a combination of factors. Cognex’s recent financial results show a modest beating of third-quarter earnings before interest and taxes (EBIT), but the company’s organic growth was weaker than anticipated due to a challenging business environment. Furthermore, Cognex’s guided fourth-quarter organic revenue fell short of consensus expectations, indicating a potential slowdown in the company’s performance.
Additionally, Ritchie anticipates a decline in both Logistics and Electronics sectors by approximately 30% for 2023. He also lowered his 2024 earnings per share (EPS) estimate for Cognex from $1.05 to $0.90, taking into account the slower growth, continuous investment in the Emerging Customer Initiative, incentive compensation challenges, and gross margin dilution from Moritex. Moreover, he notes that the increasing competition, particularly from China, could influence the company’s growth in the near-to-medium term. He concludes his report by lowering his 12-month price target for Cognex to $37, implying a 2025 free cash flow yield of approximately 3.5%.
According to TipRanks, Ritchie is a 4-star analyst with an average return of 7.1% and a 52.43% success rate. Ritchie covers the Industrials sector, focusing on stocks such as Flowserve, Johnson Controls, and Lennox International.
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Cognex (CGNX) Company Description:
Cognex Corp. engages in the provision of machine vision products that capture and analyze visual information in order to automate tasks, primarily in manufacturing processes, where vision is required. The company was founded by Robert J. Shillman, William Silver, and Marilyn Matz in 1981 and is headquartered in Natick, MA.
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