Entegris’ Q2 Earnings Preview

Analysts at Deutsche Bank provided their outlook on Entegris, Inc. (NASDAQ:ENTG) ahead of the company’s Q2 earnings, and lowered their price target to $125 from $145.

The company closed its acquisition of CMC Materials, Inc. on July 6th, and the analysts remain positive on the deal as they believe the market is underappreciating the CMP slurries/pads business, and they see the potential for additional accretion from revenue synergies.

On the organic business, however, the analysts are turning more cautious on market growth in 2023, and they now expect industry wafer starts to only grow low-single digit in 2023 and WFE spending to be down approximately 10% year-over-year. Therefore, the analysts estimate ex-acquisition growth of 6%, compared to the prior forecast of 12%.

The analysts updated their model to include CMC Materials starting in Q3/22, resulting in an increase in the full 2022-year EPS estimate from $4.35 to $4.45 and 2023-year EPS from $4.85 to $5.00.