Street Calls of the Week: Don't leave American Express in your portfolio

investing.com:

Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week: upgrades for Li Auto and Enphase Energy, downgraded for GlobalFoundries, American Express, and Albemarle.

InvestingPro subscribers always get first dibs on market-moving rating changes.

What happened? On Monday, JPMorgan downgraded GlobalFoundries Inc (NASDAQ:GFS) to Neutral with a $56 price target

What’s the full story? JPMorgan analysts have downgraded GlobalFoundries Inc. (GFS) from an Overweight to a Neutral rating, setting a price target of $56.00 (revised down from $65.00). The rationale behind this decision, according to the note, lies in the declining specialty/mature node foundry manufacturing activity across various markets, which may lag behind semiconductor industry recovery trends by 1-2 quarters. Despite the company’s already adjusted CY24 revenue and EPS estimates (8% and 22% lower, respectively, compared to consensus expectations), there are additional concerns.

GlobalFoundries faces challenges as its FinFET customers (including AMD (NASDAQ:AMD), Qualcomm (NASDAQ:QCOM), and Marvell (NASDAQ:MRVL)) at 12nm-16nm nodes migrate to lower geometry nodes not supported by GFS. Moreover, the team’s slower response in backfilling these migrations exacerbates the situation.

Approximately 20-25% of the company’s total revenues still come from plain-vanilla 12nm and higher FinFET capacity mix. Additionally, certain RF customers may potentially migrate away in the mid-to-long term due to misalignment with future technology/product roadmaps.

Furthermore, intensified competition from US/Europe/Japan domestic specialty/mature foundry manufacturers (such as TSMC and UMC) outside of Taiwan adds to the complexity. Considering these