Morgan Stanley Cuts Price Targets on Several Semiconductor Stocks

© Reuters.

By Sam Boughedda

Morgan Stanley analyst Joseph Moore cut the price targets of several semiconductor names Friday, telling investors in a note that they are lowering their 2023 numbers.

The analyst said they are trying to model macro deceleration, which seems inevitable, but it will take time to play out.

"As near-term fundamentals mostly remain strong, the macroeconomic picture gets murkier. While the overall MS macro view is for persistent, modest GDP growth through next year, that's likely to feel like a more severe erosion as components of GDP shift back to a traditional mix of services vs. goods, reversing the outperformance of goods through the pandemic," wrote Moore.

"As we have highlighted for some time, that will take a long time to play out given near-term supply chain concerns, but rather than just talk about economic risk in a vague and formless fashion, we are trying to factor that into our numbers in a more concrete way for CY23, with a 2019-ish downturn kicking in over the course of next year."

Price targets on names such as NXP Semiconductor NV (NASDAQ:NXPI) ($180 from $194), ON Semiconductor Corporation (NASDAQ:ON) ($56 from $60), Texas Instruments (NASDAQ:TXN) ($155 from $170), Sensata Technologies Holding NV (NYSE:ST) ($57 from $62), TE Connectivity (NYSE:TEL) ($140 from $147), Amphenol Corp (NYSE:APH) ($75 from $79), Microchip Technology Inc. (NASDAQ:MCHP) ($81 from $85), and Marvell Technology Group (NASDAQ:MRVL) ($62 from $58) were trimmed.