Goldman Sachs Upgrades Advantest Corp (6857:JP) to Buy with New Price Target of ¥8,100
Goldman Sachs recently upgraded its stance on Advantest Corp (6857:JP) (OTC: ATEYY) from Neutral to Buy, setting a new price target of ¥8,100, up from the previous target of ¥6,000. The firm predicts that Advantest, a leader in high-end System-on-Chip (SoC) testers, will experience higher sales growth than initially projected. This growth is attributed to the increased demand for semiconductors in high-performance computing (HPC) and artificial intelligence (AI) applications, leading to extended test times.
The analyst at Goldman Sachs noted that the consensus earnings forecasts for fiscal year March 2025 align with the company's guidance, which was revised upwards in the first-quarter results. The firm anticipates a sustained demand for high-end SoC testers, signaling the beginning of an earnings upcycle that could drive future share price appreciation.
Goldman Sachs also raised its operating profit estimate for fiscal year March 2026 by nearly 30% compared to the current Bloomberg consensus. This reflects a more optimistic outlook on Advantest's financial performance in the coming years. The firm's analysis indicates that increasing earnings expectations from March 2025 to 2026 could significantly impact the stock's trajectory.
With the new price target of ¥8,100, representing a 35% increase from the previous target, Goldman Sachs demonstrates strong confidence in Advantest's growth potential. The upgrade to a Buy rating is based on an estimated EV/EBITDA multiple of 20X for fiscal year March 2026, supported by the company's market position and anticipated sales growth in the high-end SoC testing segment.
In conclusion, Goldman Sachs' bullish outlook on Advantest suggests that investors may benefit from the company's expected growth and performance in the semiconductor testing industry. This upgrade to a Buy rating and increased price target reflect the firm's belief in Advantest's potential for future success. Investors should consider this information when making decisions about their investment portfolios.
