Goldman Sachs Upgrades Advantest Corp to Buy, Raises Price Target to ¥8,100
Goldman Sachs has recently upgraded its stance on Advantest Corp (6857:JP) (OTC: ATEYY) from Neutral to Buy, with a revised price target of ¥8,100, up from the previous ¥6,000. The firm predicts that Advantest, a leader in high-end System-on-Chip (SoC) testers, will experience an increase in sales beyond initial expectations. This growth is attributed to the extended test times required for semiconductors used in high-performance computing (HPC) and artificial intelligence (AI) applications.
The analyst at Goldman Sachs noted that the consensus earnings forecasts for fiscal year March 2025 are in line with the company's guidance, which was raised during the first-quarter results. However, the firm anticipates continued strong demand for high-end SoC testers, signaling the start of an earnings upcycle that could boost the stock price in the future.
Goldman Sachs has also introduced a higher operating profit estimate for fiscal year March 2026, which is nearly 30% above the current Bloomberg consensus. This reflects a more positive outlook on Advantest's financial performance over the next few years. The firm believes that increasing earnings expectations from fiscal years March 2025 to 2026 will play a crucial role in the stock's future trajectory.
With the new price target of ¥8,100 representing a 35% increase from the previous target, Goldman Sachs has shown strong confidence in Advantest's growth potential. The upgrade to a Buy rating is supported by an estimated EV/EBITDA multiple of 20X for the fiscal year ending March 2026, which the firm considers justified by the company's market position and expected sales growth in its high-end SoC testing segment.
In conclusion, the upgrade and revised price target for Advantest Corp by Goldman Sachs indicate a positive outlook for the company's future performance. Investors may want to consider this information when making decisions about their portfolios, as it suggests potential growth opportunities in the semiconductor testing industry.