On Thursday, Citi reiterated a Neutral rating on Entegris Inc (NASDAQ: NASDAQ:ENTG), while raising its price target to $134 from $117. The adjustment follows a revision of the fiscal year 2024 earnings per share (EPS) estimates, which were decreased by 4% to better align with the company's full-year outlook.
The new price target is based on a price-to-earnings (P/E) ratio of 29 times the calendar year 2025 (CY25) EPS forecast of $4.61, which is above the three-year average P/E ratio of 27 times.
The decision to shift the valuation basis from calendar year 2024 to calendar year 2025 was made to reflect growing confidence in the semiconductor cycle recovery. Citi's approach factors in Entegris' position in the market, recognizing its premium valuation within the sector.
"Our Neutral rating reflects premium valuation and alignment with our Phase 2 cyclical recovery sector framework where we prefer equipment/component makers over consumables or wafer starts driven stocks like ENTG," said Citi.
InvestingPro Insights
Entegris Inc (NASDAQ: ENTG) has garnered attention with its notable market performance and Citi's revised price target. Delving into the data, Entegris boasts a high shareholder yield, signaling a potentially attractive opportunity for investors seeking returns through dividends and share repurchases. Additionally, analysts anticipate that Entegris will maintain profitability, with net income expected to grow this year. This aligns with Citi's confidence in the semiconductor cycle recovery and the company's ability to capitalize on it.
InvestingPro Tips highlight that Entegris is trading at a high earnings multiple, with a current P/E ratio of 112.31. While this may suggest a premium valuation, it's important to note that the company has demonstrated a strong return over the past year, with a 1 Year Price Total Return of 51.34%. Moreover, Entegris' liquid assets exceed its short-term obligations, indicating a solid financial position to navigate market fluctuations.
From the InvestingPro Data, Entegris has an adjusted market cap of $20.4B and a revenue growth of 7.37% over the last twelve months as of Q4 2023. These figures underscore the company's growth trajectory and market standing. With the next earnings date on April 23, 2024, investors will be keen to see if the company's performance aligns with these positive indicators.
For those interested in a deeper analysis, InvestingPro offers more tips on Entegris, which can be accessed at https://www.investing.com/pro/ENTG. Utilize coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover numerous additional tips, including insights on Entegris' trading near its 52-week high and its valuation multiples.
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