Ichor Holdings (ICHR – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Krish Sankar from TD Cowen remains neutral on the stock and has a $31.00 price target.
Krish Sankar has given his Buy rating to Ichor Holdings due to a combination of factors. Despite the current industrial environment and the company’s near-term outlook exhibiting modest quarterly sales of around $200 million, Sankar sees potential for more substantial growth in the latter half of next year. Although short-term growth factors may be hard to identify and there is an existing inventory surplus, Sankar views Ichor’s long-term prospects favorably. This positive outlook is influenced by the company’s tight control over operational expenditure, its future margin-boosting gas panels, and new design wins in the emerging silicon carbide opportunity.
Furthermore, the opportunity presented by extreme ultraviolet lithography (EUV) is seen as a mixed bag. While there are expectations of flat sales in 2024, Sankar believes that Ichor can increase its dollar content per EUV tool in the long run. Despite a drop in gross margins due to inventory reserves and product mix, it is expected that these negative influences will diminish in 2024. Future product introductions are predicted to be margin accretive. While short-term drivers for growth are limited, Sankar believes that Ichor is well situated to outperform the market during a recovery period. Gains in market share, design wins, EUV, and silicon carbide are all expected to contribute to the company’s core business and provide future leverage.
In another report released yesterday, Stifel Nicolaus also maintained a Buy rating on the stock with a $35.00 price target.
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Ichor Holdings (ICHR) Company Description:
Ichor Holdings Ltd. engages in designing, engineering, and manufacturing fluid delivery subsystems for semiconductor capital equipment. It offers gas and chemical delivery systems, which are key elements of the process tools used in the manufacturing of semiconductor devices. It also manufactures precision machined components, weldments, and proprietary products for use in fluid delivery systems for direct sales to its customers. The company was founded in 1999 and is headquartered in Fremont, CA.
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