In a report released yesterday, Joe Ritchie from Goldman Sachs maintained a Sell rating on Cognex, with a price target of $42.00.
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Joe Ritchie has given his Sell rating due to a combination of factors impacting Cognex’s outlook. Despite the company’s efforts to balance its end-market setup for 2026, there are concerns about the moderation of growth in the Logistics sector as customers adjust to recent investments. Additionally, while Consumer Electronics is seeing a resurgence, the Automotive sector remains weak with a flat outlook, which could weigh on overall performance.
Furthermore, Cognex’s financial framework, although reaffirmed, suggests a cautious approach. The company’s aim to achieve a 25% EBITDA margin sustainably is reliant on cost actions, with current guidance indicating margins around 20% for FY25. This short cycle business model, coupled with limited visibility beyond three months, adds to the uncertainty. These factors, combined with the lack of a significant inflection in PMI, contribute to the Sell rating.
In another report released yesterday, J.P. Morgan also downgraded the stock to a Sell with a $35.00 price target.