Utilized Supplies This autumn preview: Will continued weak point in chip business dent earnings?

Utilized Supplies (NASDAQ:AMAT) is scheduled to announce This autumn earnings outcomes on Thursday, Nov. 17, after market shut.

The consensus EPS estimate is $1.75 (-9.8% Y/Y) and the consensus income estimate is $6.44B (+5.2% Y/Y).

Over the past 2 years, AMAT has overwhelmed EPS and income estimates 75% of the time.

Over the past 3 months, EPS estimates have seen 3 upward revisions and 18 downward. Income estimates have seen 4 upward revisions and 14 downward.

The chipmaker’s inventory dipped after it supplied This autumn outlook to mirror new chip export management guidelines, that are anticipated to scale back This autumn gross sales by ~$400M.

Moreover, knowledge from the Semiconductor Business Affiliation Worldwide confirmed a slowdown in semiconductor gross sales, down 6% sequentially, for the quarter ended Sept. 30.

However New Road Analysis upgraded Utilized Supplies (AMAT), saying the ache within the chip business ought to finish quickly and now could also be a very good time to start out constructing positions.

Financial institution of America stays bullish on Utilized Supplies (AMAT) as a consequence of optimism surrounding the CHIPS Act. Extra just lately, it mentioned the bull case for semiconductors is beginning to turn into compelling on account of excessive profitability, excessive limitations to entry and chip shares’ underperformance.

UBS included Utilized Supplies (AMAT) to its tech focus listing “as a consequence of its management in semiconductor tools, which stands to learn from sturdy demand pushed by massive knowledge and AI”.

Q3 recap:

• The semiconductor agency’s shares edged larger after its Q3 outcomes beat expectations and its steering appeared to stave off fears of a slowdown.
• Nonetheless, some analysts famous that there could also be some softening within the reminiscence market in 2023.
• However Needham expects to see provide chain enhancements and sequential development by means of Q2 2023.

SA contributor Cory Cramer mentioned Utilized Supplies (AMAT) is a top quality however deeply cyclical inventory, ranking the inventory Maintain for now as he waits for a decrease entry level.

Shares of Utilized Supplies (AMAT) declined 34.5% within the final one 12 months, underperforming the S&P 500 index by a really vast margin.