Needham expressed concern over competitive pricing and a drop in Chinese customers
Laser manufacturers nLight Inc (NASDAQ:LASR) and IPG Photonics Corporation (NASDAQ:IPGP) are feeling the heat today after Needham expressed concerns about both companies. Below, we'll look at these bear note, and how they're affecting the two semiconductor names.
Starting with LASR, the analyst slashed its price target to $18 from $19, citing slowing global growth and a sluggish manufacturing environment. Needham cut its full-year revenue and profit estimates as well, amid competitive pricing from China, and a dip in Chinese customers. The stock has lost 7% and is trading at $13.44 in response, bottoming out at a one-month low of $13.17 earlier today.
Needham's downgrade put LASR's consensus 12-month target price at $19.43, which represents a region the stock hasn't hit since early July, as well as a 45% premium to current levels. Considering the security's year-to-date deficit of 24.7%, more analysts could begin to follow suit. While half of the eight in coverage call nLight a "hold," the other half say it's a "buy" or better.
IPG Photonics is taking quite the beating, too, falling 6.8% to trade at $126.80 after Needham downgraded the stock to "hold" from "buy." The broker held its price target steady, but added that it was concerned about the "unsettled" global macro enviroment. IPGP's dip could mark its biggest percentage drop in over five months, and puts the equity back south of its 20-day moving average -- a trendline it conquered yesterday for the first time since late-September.
Like nLight, sentiment among the brokerage bunch has been split prior to today's downgrade. Half of the eight in coverage call IPGP a "strong buy," while the other half say "hold." On the other hand, the consensus 12-month price target of $171.01 sits all the way up near its yearly April highs, and holds a 35.4% premium to the stock's current perch.