Bay Area Ideas has upgraded 3M (MMM) due to its robust sales growth, while Julia Ostian has adjusted her stance on Super Micro (AMCI) due to improved revenue guidance. On the downgrade front, Bay Area Ideas has revised their outlook on Taiwan Semiconductor Manufacturing Company (TSMC) given production constraints, and The Alpha Sieve has downgraded Wolfspeed (WOLF) following negative market reactions to its fiscal Q1 earnings.
Upgrades
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3M Company (MMM): Upgrade to Hold by Bay Area Ideas. Analyst cites multiyear highs in sales growth, though caution is warranted due to plateauing margins.
“3M delivered robust Q3 results, beating expectations and raising guidance… Guidance was also raised for key metrics, but even in annual terms, margin expansion is expected to slow.”
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Super Micro Computer (SMCI): Upgrade to Hold by Julia Ostian. Despite a history of earnings misses, the analyst recognizes improved revenue guidance amid steep stock declines.
“I think the time has come to upgrade the stock to a hold rating, and to recognize not only the bad, but the good as well… Due to a steep decline and improved revenue guidance, a hold rating is now justifiable.”
Downgrades
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Taiwan Semiconductor Manufacturing Company (TSMC): Downgrade Buy to Hold by Bay Area Ideas. The analyst notes slowing growth and production constraints as the driving factors.
“While good operating efficiency is helping to soften the blow, EPS growth is slowing and is expected to continue slowing. Therefore, I have mixed views regarding the multiyear high in the forward P/E ratio. Since the overall risk/reward has deteriorated somewhat, I believe investors should take some profits.”
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Wolfspeed (WOLF): Downgrade to Hold by The Alpha Sieve. The analyst highlights concerns following weak Q2 revenue guidance and increased production costs impacting gross margins.
“We already know that Q2 is likely to see revenue of only around $170M, so this would imply a massive step-up in H2-26 (of well over $200M quarter), which we think may be unrealistic.’”