KeyBanc Reiterates Overweight Rating on Advanced Energy Industries (AEIS)

KeyBanc analyst Steve Barger reiterated an Overweight rating and $130.00 price target on Advanced Energy Industries (NASDAQ: AEIS).

The analyst commented, "AEIS hosted an analyst day in NYC where it presented 2030 targets for $3B in revenue, 43% gross margin (with a cycle trough of ~40%), and $15 in EPS. For revenue, AEIS expects to outgrow its blended 6.5% market estimate by 40% (9% organic CAGR) with the balance from M&A. AEIS expects GM improvement to 43% from manufacturing cost reductions, improved mix, and operating leverage. With respect to end markets, AEIS sees a Semi SAM of $3.1B, and given increased dep/etch and power intensity, share gains in plasma power, and wins in other applications, it is targeting >1.3x WFE growth. In I&M, AE sees a $4.5B SAM in which it currently has low share in a market characterized by tens of thousands of potential customers often served by small, niche suppliers. AEIS expects to drive rapid new product development and share gains from its exiting technology and platforms designed to scale. In Datacenter, AE will focus on high-end proprietary products for which it can be sole source or a strong #2, and it sees a pipeline of opportunities that could drive $100M of incremental revenue. We think AEIS’s targets may look aggressive given current conditions, but its superior products and culture of innovation should allow it to make solid directional progress. Pending more clarity on cycle inflection and AEIS’s progress toward its goals, we are maintaining estimates, and we reiterate our OW rating and $130 PT."

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Shares of Advanced Energy Industries closed at $111.56 yesterday.

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