DBS analyst Jim Hin Kwong Au has maintained their bullish stance on GFS stock, giving a Buy rating yesterday.
Jim Hin Kwong Au’s Buy rating for GlobalFoundries Inc is predicated on a blend of strategic partnerships and projected capacity expansions backed by significant legislative support. A cornerstone of this positive outlook is the long-term agreement with Qualcomm, which promises to secure substantial revenues through to 2028, exceeding the total revenue of FY21. This agreement not only anchors revenue streams amidst demand fluctuations but also signifies a deep collaboration in key technological domains such as 5G, automotive, and IoT connectivity. Additionally, a majority of GlobalFoundries’ capacity over the next few years is already under long-term agreements, indicating a robust and committed customer base.
Further bolstering the Buy rating is GlobalFoundries’ strategic expansion in European markets, exemplified by the joint venture with STMicroelectronics to construct a new manufacturing facility in France. This move is poised to substantially increase the company’s capacity, thereby enhancing its competitive stance in the semiconductor space. The expansion efforts are further underpinned by potential funding from the US and European CHIPS Acts, which could significantly offset R&D and tax expenses. Coupled with the company’s undervalued share price relative to its historical performance and market peers, these strategic initiatives position GlobalFoundries to capture growth and navigate the semiconductor industry’s dynamics effectively.
Hin Kwong Au covers the Technology sector, focusing on stocks such as Apple, ASML Holding, and KLA. According to TipRanks, Hin Kwong Au has an average return of 18.3% and an 86.49% success rate on recommended stocks.
In another report released yesterday, Susquehanna also maintained a Buy rating on the stock with a $65.00 price target.
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GlobalFoundries Inc (GFS) Company Description:
GLOBALFOUNDRIES Inc. is a semiconductor foundry. It manufactures complex ICs that enable electronic devices that are pervasive in every sector of the economy. It derives revenue primarily from fabricating semiconductor wafers using the company’s manufacturing processes for the company’s customers based on their proprietary integrated circuit designs and, from design, mask making, bumping, probing, assembly, and testing services.
Read More on GFS:
- Globalfoundries Inc. Reports Earnings: Did it Beat Estimate Forecasts?
- GlobalFoundries price target lowered to $62 from $65 at Deutsche Bank
- Chip Projections Hit GlobalFoundries (NASDAQ:GFS) in Trading
- GlobalFoundries Reports Fourth Quarter 2023 and Fiscal Year 2023 Financial Results
- GlobalFoundries sees Q1 adjusted EPS 18c-28c, consensus 46c
