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Globalfoundries: Morgan Stanley Downgrades to Equal-Weight, PT to $35.
ByAinvest
Wednesday, Aug 6, 2025 12:31 pm ET1min read
Globalfoundries: Morgan Stanley Downgrades to Equal-Weight, PT to $35.
Morgan Stanley has recently downgraded GlobalFoundries Inc. (NYSE: GFS) to an Equal-Weight rating and reduced its price target to $35 from $40. This decision comes on the heels of the company's second-quarter 2025 earnings report, which exceeded analysts' expectations but saw a significant drop in stock price [2].GlobalFoundries reported an earnings per share (EPS) of $0.42, beating the forecast by 16.67%. Revenue for Q2 2025 was $1.69 billion, slightly above expectations. Despite these positive results, the company's stock fell by 10.34% in pre-market trading, closing at $33.62 [2].
The company's strong financial performance is highlighted by a gross margin of 25.2% and an operating margin of 15.3%. GlobalFoundries secured nearly 200 design wins, doubling year-over-year, and expanded its presence in the automotive and communications markets [2].
However, the stock's decline can be attributed to broader market conditions and sector-specific concerns, such as supply chain disruptions and increased competition in the semiconductor industry. The company's balance sheet remains strong, with a current ratio of 2.51 and more cash than debt [2].
Morgan Stanley's downgrade reflects a cautious outlook on the company's ability to maintain its growth trajectory amidst industry challenges. The firm's Equal-Weight rating suggests a neutral stance, indicating that GlobalFoundries' performance is neither particularly strong nor weak [1].
Investors should closely monitor GlobalFoundries' performance in the coming quarters to assess the validity of Morgan Stanley's price target. The company's ability to navigate industry challenges and maintain profitability margins will be key factors in determining its long-term success.
References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-globalfoundries-beats-q2-2025-expectations-but-shares-fall-93CH-4170923
[2] https://www.marketbeat.com/instant-alerts/globalfoundries-inc-nysegfs-updates-q2-2025-earnings-guidance-2025-07-31/
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