- Needham claimed analyst James Ricchiuti MKS Instruments Inc MKSI with a purchase and raised the price target from $90 to $110.
- At its analyst day, MKS presented the most compelling case for acquiring Atotech, reassuring investors that deleveraging is a priority while providing a reasonable long-term model with multiple potential upsides, characteristic of MKS’s conservative approach.
- Ricchiuti pulled out of the Atotech deal more constructively, including a better appreciation of the technology differentiation and market strength of a specialty chemicals business, a coating equipment business and a PCB laser manufacturing technology under one roof.
- Investors will better appreciate the complementary nature of Atotech’s business with MKS’ PCB laser drilling and high-density interconnect businesses over the next year.
- The business combination offered incremental opportunities and increased content in the high-growth EV market. As a result of the acquisition, MKS increased its presence in the global automotive market at a time when the industry was steadily moving toward electrification, Ricchiuti writes.
- Electronics & Packaging will likely be the fastest growing segment of MKS’ business.
- Shares have underperformed market and industry peers in 2022, which the analyst attributed to the longer time it took to complete Atotech’s acquisition amid unprecedented hikes in interest rates.
- The analyst kept the estimates for Q4’22 and 2023 and introduced the forecast for 2024. MKS is attractive at current levels, Ricchiuti wrote.
- Price promotion: MKSI shares traded 2.62% lower at $83.12 on the last check Thursday.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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