Hold Rating Maintained for Allegro MicroSystems Amid Near-Term Optimism and Long-Term Valuation Concerns

Morgan Stanley analyst Joseph Moore maintained a Hold rating on Allegro MicroSystems (ALGM – Research Report) today and set a price target of $25.00.

Joseph Moore has given his Hold rating due to a combination of factors influencing Allegro MicroSystems’ stock performance. The company is expected to show strong results in the near term, particularly in the automotive sector, due to the pull-in behavior caused by tariffs. However, the broader cyclical recovery remains uncertain, with no significant improvement or deterioration observed.
Despite optimism for near-term revenue growth and gross margin improvement, the current valuation of Allegro MicroSystems is considered high. The stock is trading above its high-margin analog peers, and a cyclical recovery seems already priced in. Therefore, while there is potential for near-term outperformance, the long-term valuation concerns lead to maintaining a Hold rating with a price target of $25.

Based on the recent corporate insider activity of 46 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ALGM in relation to earlier this year.