ARM (NASDAQ:ARM) Rating Lowered to "Hold" at HSBC

Key Points

• HSBC downgraded ARM from “buy” to “hold” while keeping a $315 price target, implying only modest upside from current levels.
• Despite HSBC’s cut, analyst sentiment remains broadly positive: 18 analysts rate ARM a Buy, 8 a Hold, and 1 a Sell, with a consensus rating of Moderate Buy and an average target of $295.25.
• ARM shares were down 7.5% and opened at $298.99; the stock remains highly valued, with a market cap of $319.35 billion and a P/E ratio of 355.94.

ARM (NASDAQ:ARM - Get Free Report) was downgraded by HSBC from a "buy" rating to a "hold" rating in a research note issued to investors on Tuesday, MarketBeat reports. They currently have a $315.00 target price on the stock. HSBC's price objective suggests a potential upside of 5.35% from the company's current price.

Other research analysts have also recently issued reports about the company. Guggenheim boosted their target price on ARM from $240.00 to $255.00 and gave the stock a "buy" rating in a research note on Thursday, May 7th. Barclays lifted their price objective on ARM from $250.00 to $360.00 and gave the company an "overweight" rating in a research note on Monday, June 1st. TD Cowen boosted their price objective on ARM from $265.00 to $475.00 and gave the stock a "buy" rating in a research report on Wednesday, June 24th. Mizuho upped their target price on shares of ARM from $425.00 to $500.00 and gave the stock an "outperform" rating in a research note on Monday, June 8th. Finally, Raymond James Financial reaffirmed an "outperform" rating on shares of ARM in a report on Thursday, May 7th. Eighteen research analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus price target of $295.25.

ARM Stock Down 7.5%

Shares of ARM opened at $298.99 on Tuesday. The company has a market cap of $319.35 billion, a P/E ratio of 355.94, a PEG ratio of 11.74 and a beta of 3.76. ARM has a fifty-two week low of $100.02 and a fifty-two week high of $452.70. The firm's 50 day moving average price is $319.85 and its 200 day moving average price is $198.68.

ARM (NASDAQ:ARM - Get Free Report) last issued its quarterly earnings results on Wednesday, April 1st. The company reported $0.60 EPS for the quarter. The company had revenue of $1.49 billion during the quarter. ARM had a net margin of 18.37% and a return on equity of 12.43%. Research analysts forecast that ARM will post 1.12 earnings per share for the current year.

Insiders Place Their Bets

In other news, insider Charlotte Claire Eaton sold 4,000 shares of the firm's stock in a transaction dated Thursday, May 21st. The stock was sold at an average price of $282.77, for a total transaction of $1,131,080.00. Following the sale, the insider owned 7,805 shares of the company's stock, valued at approximately $2,207,019.85. This trade represents a 33.88% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider William Abbey sold 6,566 shares of the business's stock in a transaction that occurred on Monday, June 1st. The stock was sold at an average price of $402.72, for a total value of $2,644,259.52. Following the sale, the insider owned 20,563 shares of the company's stock, valued at approximately $8,281,131.36. The trade was a 24.20% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 238,906 shares of company stock valued at $56,245,828 over the last quarter.

Institutional Trading of ARM

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Rathbones Group PLC grew its holdings in shares of ARM by 4,638.8% during the fourth quarter. Rathbones Group PLC now owns 500,043 shares of the company's stock worth $54,660,000 after purchasing an additional 489,491 shares during the last quarter. Paragon Capital Management Inc. acquired a new stake in shares of ARM during the fourth quarter worth about $826,000. Lansdowne Partners UK LLP purchased a new stake in shares of ARM in the 3rd quarter valued at about $8,486,000. Zurcher Kantonalbank Zurich Cantonalbank lifted its holdings in shares of ARM by 34.7% in the 4th quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 24,188 shares of the company's stock valued at $2,644,000 after purchasing an additional 6,232 shares during the last quarter. Finally, Partners Group Holding AG acquired a new stake in shares of ARM in the 4th quarter valued at about $798,000. Institutional investors and hedge funds own 7.53% of the company's stock.

About ARM

Arm Limited NASDAQ: ARM is a global semiconductor IP company best known for designing energy-efficient processor architectures and related technologies that underpin a wide range of computing devices. Founded in 1990 as a joint venture between Acorn Computers, Apple and VLSI Technology and headquartered in Cambridge, England, Arm develops the ARM instruction set architectures and core processor designs that chipmakers license and integrate into custom system-on-chip (SoC) products. The company operates a licensing and royalty business model rather than manufacturing chips itself.

Arm's product portfolio includes CPU core families (such as Cortex and Neoverse lines), GPU and multimedia IP (Mali), neural processing units (Ethos) and a suite of system and physical IP blocks.

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