Tower Semiconductor (NASDAQ:TSEM) Shares Down 9.6% - Here's Why

Key Points

• Tower Semiconductor shares fell 9.6% to about $238.51, with trading volume roughly 77% below the average session volume.
• Analysts remain broadly positive, with a consensus “Moderate Buy” rating and an average price target of $294.80; recent targets range from $300 to $367.
• The company exceeded quarterly expectations, reporting $0.88 in EPS versus $0.76 expected and $460.08 million in revenue, up 23.7% year over year. However, CEO Russell Craig Ellwanger recently sold shares worth approximately $25.9 million.

Tower Semiconductor Ltd. (NASDAQ:TSEM - Get Free Report)'s stock price dropped 9.6% during trading on Tuesday . The company traded as low as $241.83 and last traded at $238.5080. Approximately 530,787 shares changed hands during trading, a decline of 77% from the average session volume of 2,354,208 shares. The stock had previously closed at $263.73.

Analysts Set New Price Targets

Several analysts have weighed in on the stock. Benchmark reiterated a "buy" rating on shares of Tower Semiconductor in a research note on Wednesday, August 5th. Susquehanna increased their price target on Tower Semiconductor from $180.00 to $330.00 and gave the stock a "positive" rating in a research report on Thursday, May 14th. Wedbush raised their price objective on Tower Semiconductor from $140.00 to $300.00 and gave the stock a "neutral" rating in a research note on Thursday, May 14th. Bank of America assumed coverage on Tower Semiconductor in a report on Friday, August 7th. They issued a "buy" rating and a $367.00 price objective for the company. Finally, UBS Group reiterated a "buy" rating on shares of Tower Semiconductor in a research report on Wednesday, July 15th. Five analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company. Based on data from MarketBeat, the company has an average rating of "Moderate Buy" and a consensus price target of $294.80.

Tower Semiconductor Stock Down 8.7%

The firm's 50-day moving average price is $245.04 and its 200 day moving average price is $206.73. The company has a market capitalization of $27.07 billion, a price-to-earnings ratio of 94.71 and a beta of 0.90. The company has a current ratio of 4.91, a quick ratio of 4.31 and a debt-to-equity ratio of 0.04.

Tower Semiconductor (NASDAQ:TSEM - Get Free Report) last issued its quarterly earnings results on Wednesday, August 5th. The semiconductor company reported $0.88 earnings per share for the quarter, topping analysts' consensus estimates of $0.76 by $0.12. The company had revenue of $460.08 million during the quarter, compared to the consensus estimate of $454.68 million. Tower Semiconductor had a net margin of 16.94% and a return on equity of 9.83%. The firm's quarterly revenue was up 23.7% on a year-over-year basis. During the same quarter in the prior year, the firm posted $0.41 EPS. On average, sell-side analysts forecast that Tower Semiconductor Ltd. will post 3.57 EPS for the current fiscal year.

Insiders Place Their Bets

In other Tower Semiconductor news, CEO Russell Craig Ellwanger sold 104,226 shares of the company's stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $248.34, for a total transaction of $25,883,484.84. Following the completion of the sale, the chief executive officer directly owned 526,788 shares in the company, valued at $130,822,531.92. This represents a 16.52% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. 1.00% of the stock is owned by insiders.

Institutional Trading of Tower Semiconductor

Several institutional investors and hedge funds have recently modified their holdings of TSEM. Amundi grew its position in Tower Semiconductor by 86.8% in the first quarter. Amundi now owns 21,617 shares of the semiconductor company's stock valued at $771,000 after acquiring an additional 10,042 shares during the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its holdings in shares of Tower Semiconductor by 4.1% in the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 99,633 shares of the semiconductor company's stock worth $3,553,000 after acquiring an additional 3,954 shares during the last quarter. Geode Capital Management LLC lifted its holdings in shares of Tower Semiconductor by 0.7% in the second quarter. Geode Capital Management LLC now owns 95,384 shares of the semiconductor company's stock worth $4,135,000 after acquiring an additional 662 shares during the last quarter. Hsbc Holdings PLC acquired a new stake in shares of Tower Semiconductor in the 2nd quarter valued at approximately $438,000. Finally, Arrowstreet Capital Limited Partnership acquired a new stake in shares of Tower Semiconductor in the 2nd quarter valued at approximately $5,809,000. 70.51% of the stock is currently owned by institutional investors.

Tower Semiconductor Company Profile

Tower Semiconductor, traded on NASDAQ under the symbol TSEM, is a specialty foundry company that provides analog and mixed-signal semiconductor manufacturing services to a broad array of customers worldwide. The company focuses on delivering tailored process technologies for high-growth markets, including radio frequency (RF), power management, imaging, automotive electronics, and Internet of Things (IoT) applications. By combining deep process know-how with flexible manufacturing capabilities, Tower Semiconductor supports the development and volume production of advanced semiconductor devices for fabless and integrated device manufacturer customers.

The company's technology portfolio spans standard and specialty processes such as CMOS, BiCMOS, high-voltage, radio frequency, silicon photonics, micro-electromechanical systems (MEMS) and image sensor production.

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