IPG Photonics (NASDAQ:IPGP) specializes in laser products. That may sound extremely niche, but for one analyst, that niche posed some terrific opportunities for growth ahead. So much so that said analyst upgraded the stock’s outlook and sent IPG Photonics stock up over 13% at one point in Wednesday afternoon’s trading.
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The good news for IPG Photonics, as far as Raymond James analysts were concerned, was that there was some significant new upside potential in IPG’s earnings. IPG recently branched out into electric vehicles by focusing on battery capacity. Raymond James analysts project that, by 2025, electric vehicles will account for nearly half of IPG’s revenue. That means a significant earnings upside potential, sufficiently so that Raymond James hiked IPG from “market perform” to “outperform” and raised the price target from $117.06 to $170.
On the surface, this sounds reasonable enough. After all, IPG recently started up a $200 million stock buyback plan, which should improve share prices by reducing supply, if nothing else. And we recently saw IPG’s first quarter earnings report come in. That featured a solid report that came in ahead of consensus, with IPG posting $1.26 per share in earnings against consensus estimates that called for $1.19. With next quarter’s earnings poised to do something similar—the expected range was between $1.05 and $1.35 against consensus figures of $1.18—IPG is on track to succeed again and give itself another boost with the next earnings season.
Meanwhile, analysts are somewhat split on their opinion of IPG Photonics stock. Currently, it’s rated a Moderate Buy with three Buy ratings and one Sell rating. Further, thanks to an average price target of $142, IPG Photonics stock comes with 7.22% upside potential.