Amkor Technology Inc [NASDAQ:AMKR] made a slight recovery yesterday and edged higher by 6%. This followed the stock’s upgrade by Credit Suisse. Credit Suisse gave the company an upgrade on the basis of its positioning in the upcoming 5G technological revolution, and the fact that the company is not exposed to Huawei. It is on this basis that the company was upgraded from neutral to outperform with a price target of $16.
Credit Suisse analysts also stated that with the stock’s recent pullback, the stock has good leverage to grow in industries that are now in recovery such as the auto industry. The auto industry accounts for about 23% of the company’s sales when compared to 5 to 10% of its peers’ sales. Besides analysts’ projects, Quants are extremely bullish on this stock.
The bullish outlook by analysts presents an opportunity for this stock in a number of ways. First, it inspires confidence in investors who may have doubts about the stock but want to invest in it, but may have their doubts after the recent correction. Given that the stock is trading at a key support level, this could see its value rise significantly as buying pressure pushes the stock up.
Besides the company’s upgrade by analysts, the stock’s financial numbers paint a picture of growth. The company has delivered strong and sustained revenue growth all through the pandemic. Its revenue numbers were driven by its strong demand in the consumer segment of the business.
This uplifted the company’s numbers even as revenues plummeted in the automotive market segment. Besides the strong revenues, the company also has a relatively low debt level, which has cushioned it from the adverse effects of the pandemic. It also gives the company a key leverage to grow as the pandemic starts to slow down.
With its internal fundemetals solid, this company is uniquely positioned to grow especially now that the world is getting closer to overcoming the COVID-19 pandemic. At the moment, stocks are picking up bullish momentum after AstraZeneca announced that it was continuing with its late stage trial for a COVID-19 vaccine with Oxford University.
If there is a breakthrough on this front, it would mean that the economic engine would restart with a bang. This would play in favour of AMKR because it would reinvigorate the auto market, which is one of the key revenue drivers for the company.
About Amkor Technology Inc
Amkor Technology Inc offers outsourced semi-conductor services. It is based in Tempe, Arizona.