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MKS Instruments (MKSI) Looks Good on Solid Market Demand
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On Mar 10, we issued an updated research report on premium technology company, MKS Instruments, Inc. (MKSI - Free Report) .
Bullish Factors
Improving semiconductor and other advanced markets’ business are anticipated to drive MKS Instruments’ top- and bottom-line performance in the quarters ahead. The company is also driving its business on the back of solid market demand and a newly established business strategy.
Per the new strategy, MKS Instruments is focused on reducing its interest expense and deleverage the balance sheet over time. The company is also aimed at improving its financial fundamentals through strategic inorganic expansions. For instance, the Newport Corporation buyout (completed in Apr 2016) has been bolstering the company’s top and bottom lines, by cementing its presence in the Life Sciences, Semiconductor, Research and Industrial markets. On the back of the Newport Corporation acquisition, MKS Instruments generated roughly $20 million cost synergies in 2016. Notably, the company now anticipates generating $40 million cost synergies from the deal by the end of 2018, up from the previously projected target of $35 million.
In order to strengthen its overall operational efficacy, MKS Instruments has established a Combined Targeted Operating Model. This model is aimed at boosting the company’s profitability by making it technologically competent in niche markets. In addition, the model has aided the company establish a sound capital deployment scheme to solidify its balance sheet, increase aggregate liquidity and augment shareholders’ cash returns.
By the end of 2017, MKS Instrument anticipates to generate revenues of $1.7 billion. It also expects to generate adjusted earnings in the range of $4.50–$4.96 per share by executing the strategies established under its new operating model.
Existing Causes of Worry
MKS Instruments faces intense competition in the industry. Companies like Axcelis Technologies, Inc. (ACLS - Free Report) , Brooks Automation, Inc. and Cohu, Inc. (COHU - Free Report) are some major industry rivals. Extensive business rivalry increases the bargaining power of customers and thus, exposes the company to risks of market share loss. In order to retain competitive power, the company is forced to incur heavy innovation investments, which add to its aggregate debt level. Currently, a strengthening U.S. dollar has been enhancing the competitive power of the smaller companies operating in low-cost nations, thereby increasing risks of revenue and margin loss for MKS Instruments. Furthermore, the company’s business depends on the timely supply of related products, services and equipment, which is influenced by rapidly changing volume and technical needs of customers.
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MKS Instruments (MKSI) Looks Good on Solid Market Demand
On Mar 10, we issued an updated research report on premium technology company, MKS Instruments, Inc. (MKSI - Free Report) .
Bullish Factors
Improving semiconductor and other advanced markets’ business are anticipated to drive MKS Instruments’ top- and bottom-line performance in the quarters ahead. The company is also driving its business on the back of solid market demand and a newly established business strategy.
Per the new strategy, MKS Instruments is focused on reducing its interest expense and deleverage the balance sheet over time. The company is also aimed at improving its financial fundamentals through strategic inorganic expansions. For instance, the Newport Corporation buyout (completed in Apr 2016) has been bolstering the company’s top and bottom lines, by cementing its presence in the Life Sciences, Semiconductor, Research and Industrial markets. On the back of the Newport Corporation acquisition, MKS Instruments generated roughly $20 million cost synergies in 2016. Notably, the company now anticipates generating $40 million cost synergies from the deal by the end of 2018, up from the previously projected target of $35 million.
In order to strengthen its overall operational efficacy, MKS Instruments has established a Combined Targeted Operating Model. This model is aimed at boosting the company’s profitability by making it technologically competent in niche markets. In addition, the model has aided the company establish a sound capital deployment scheme to solidify its balance sheet, increase aggregate liquidity and augment shareholders’ cash returns.
By the end of 2017, MKS Instrument anticipates to generate revenues of $1.7 billion. It also expects to generate adjusted earnings in the range of $4.50–$4.96 per share by executing the strategies established under its new operating model.
Existing Causes of Worry
MKS Instruments faces intense competition in the industry. Companies like Axcelis Technologies, Inc. (ACLS - Free Report) , Brooks Automation, Inc. and Cohu, Inc. (COHU - Free Report) are some major industry rivals. Extensive business rivalry increases the bargaining power of customers and thus, exposes the company to risks of market share loss. In order to retain competitive power, the company is forced to incur heavy innovation investments, which add to its aggregate debt level. Currently, a strengthening U.S. dollar has been enhancing the competitive power of the smaller companies operating in low-cost nations, thereby increasing risks of revenue and margin loss for MKS Instruments. Furthermore, the company’s business depends on the timely supply of related products, services and equipment, which is influenced by rapidly changing volume and technical needs of customers.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure.See these buy recommendations now >>