MKS Instruments Shares Plunge 16% on Guidance Miss

MKS Instruments (NASDAQ:MKSI) shares fell nearly 16% since the company’s reported Q3 results on Wednesday.

While both EPS of $2.74 and revenue of $954 million came in better than the Street estimates of $2.42 and $946.7 million, respectively, Q4 outlook was disappointing on lingering supply chain constraints.

For Q4, the company expects EPS of $1.34, compared to the Street estimate of $2.26, and revenue of $1 billion, compared to the Street estimate of $1.13 billion.

Post results, Deutsche Bank analysts lowered their 2023/2024 EPS estimates sharply primarily due to higher interest expense and tax rate, but their 2023 EBITDA only moved down slightly, justifying their price target cut from $100 to $90. Despite incremental macro uncertainties, the analysts continue to view the ATC deal favorably and believe the revenue synergies and the potential of quick deleveraging are underappreciated. The analysts maintained their buy rating on the company’s shares.