Diodes (DIOD – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Matt Ramsay from TD Cowen remains neutral on the stock and has a $72.00 price target.
Matt Ramsay has given his Buy rating due to a combination of factors. Firstly, despite a difficult sharp guide down from Diodes, Ramsay views this as unsurprising given the current macroeconomic backdrop. Although Diodes has been hit by fab underloadings which are expected to weigh on gross margins for some time, and revenues have been less than expected, Ramsay believes that these challenges are not entirely unexpected given the performance of peer earnings to date.
Secondly, Ramsay acknowledges the gross margin headwinds from under-loadings but sees them as temporary, expecting them to improve over time. He notes that the core weakness, product mix, and supply agreement-driven underloadings should start to subside by the second half of 2024. Additionally, despite cyclical fears extending to the Auto and Industrial sectors, Ramsay believes that Diodes’ ongoing product innovation and strong design win pipeline position the company well for recovery when the market eventually rebounds. He thus maintains his Buy rating, projecting a robust performance in the long term.
In another report released today, Benchmark Co. also reiterated a Buy rating on the stock with a $70.00 price target.
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Based on the recent corporate insider activity of 91 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DIOD in relation to earlier this year.
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Diodes (DIOD) Company Description:
Diodes, Inc. manufactures and supplies semiconductor products. It offers diodes, rectifiers, transistors, MOSFETs, protection devices, functional specific arrays, single gate, dual gate and standard logic, amplifiers and comparators, Hall-effect and temperature sensors. The firm operates through the following geographical segments: Asia, North America, and Europe. It also provides power management devices, including LED drivers, AC-DC and DC-DC switching, linear voltage regulators, and voltage references along with special function devices, such as USB power switches, load switches, voltage supervisors, and motor controllers. The company was founded on June 15, 1959 and is headquartered in Plano, TX.
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