TD Cowen analyst Joshua Buchalter has maintained their bullish stance on ALGM stock, giving a Buy rating yesterday.
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Joshua Buchalter has given his Buy rating due to a combination of factors including Allegro MicroSystems’ commitment to technological innovation and financial improvement under the leadership of new CEO Mike Doogue. Despite a challenging market environment, the company shows signs of demand recovery and inventory stabilization outside of Europe, with particular strength in China. Buchalter anticipates gross margin improvement through fiscal year 2026 as input costs stabilize.
Furthermore, Allegro’s recent financial performance, including a slight beat and raise, was positively received, especially after significant share price declines earlier in the year. Although there were some disappointments in gross margins, Buchalter remains optimistic about a return to healthier levels due to timing mismatches in input costs and price negotiations. Additionally, restructuring actions are expected to support margins, contributing to earnings per share growth. The rejection of onsemi’s bid is also seen as an opportunity for investors to engage with Allegro’s growth potential at a favorable point in the market cycle.
In another report released yesterday, Evercore ISI also reiterated a Buy rating on the stock with a $29.00 price target.