GlobalFoundries Is At The Right Place, At The Right Time, BofA Says

GlobalFoundries Inc GFS is well-positioned with only a 10% share of an addressable market opportunity estimated at $70 billion, across smartphone devices, IoT, automotive and data center, according to BofA Securities.

The GlobalFoundries Analyst: Vivek Arya initiated coverage of GlobalFoundries with a Buy rating and a price target of $88.

The GlobalFoundries Thesis: The company has long-term proprietary agreements worth around $20 billion, which gives strong visibility and pricing power, Arya said in the initiation note.

GlobalFoundries has “a Tier-1 base of customers,” including Qualcomm, Inc. QCOM, NXP Semiconductors NV NXPI, Analog Devices Inc ADI and Advanced Micro Devices, Inc. AMD, the analyst added.

“Emerging multi-year partnerships with automakers (Ford) and Tier-1s (Bosch) to address structural supply issues” as well as “lower capital intensity, stronger FCF over time due to deliver proprietary products on lower-cost/lagging edge equipment” are the other positives, Arya mentioned.

GFS Price Action: Shares of GlobalFoundries had risen by 4.37% to $64.83 at the time of publication Monday.

Photo: Courtesy GlobalFoundries