Finally some good news… Long GTAT, future Sapphire BofA/Merrill Lynch Maintains Bullish Stance on GT Advanced Tech (GTAT); While CY14 Guidance In Question, Only a Matter of Time Before Sapphire Ramp
3:49 PM ET, 09/10/2014 - Street Insider
Shares of GT Advanced Tech (NASDAQ: GTAT) have been been pounded since it was reveled yesterday that Apple won't use Sapphire for either of its iPhone 6 models, only opting to use it for the Apple Watch which won't be available until early 2015. After selling-off 13% Tuesday, shares are down another 14% today. After three downgrades and multiple negative comments, at least one analyst is holding out hope.
BofA/Merrill Lynch analyst Krish Sankar said they did not expect Apple handset introduced in CY14 to feature sapphire, although they continue to believe that sapphire adoption in mobile is a question of when and not if. Sankar said GTAT will benefit as a supplier of sapphire for mobile to Apple, and the non-sapphire segments should help drive further revenue and earnings recovery.
Sankar said the near term question is GTAT can meet its CY14 guidance of $600-$700Min revenues and how much cash the company will burn. "With 70% of FY14 revenues expected in 4Q14, there could be some risk to management's targets," the analyst said.
"While we expect the stock to be range-bound near term, we maintain our Buy rating and value it based on CY16 earnings potential," the analyst said. The price target was cut to $19.00 (from $22.00).
For an analyst ratings summary and ratings history on GT Advanced Tech click here. For more ratings news on GT Advanced Tech click here.
Shares of GT Advanced Tech closed at $14.94 yesterday.
