Morgan Stanley has increased its price objective for Teradyne (NASDAQ:TER) to $306.00, up from $288.00, while retaining an Equalweight recommendation. The stock has appreciated sharply - rising 171.66% over the last year - and is trading close to its 52-week peak of $316.54.
The bank adjusted its fiscal-year forecasts to reflect a more optimistic outlook for the company’s networking business. For FY26 Morgan Stanley raised its revenue and EPS projections from $4.2 billion/$6.31 to $4.5 billion/$6.79. For FY27 it nudged estimates from $5.2 billion/$8.74 to $5.3 billion/$9.00. Morgan Stanley pointed to stronger networking growth as the primary driver for these upward revisions.
Those model changes align with a broader shift among analysts: 15 analysts have recently revised earnings expectations higher for upcoming periods, according to InvestingPro data cited in the note.
In the firm’s updated view, Teradyne’s networking revenue is expected to double in 2026. Growth assumptions were lifted for FY26 - from 75% to 104% - while FY27 growth assumptions were adjusted from 30% to 23%. Alongside the top-line revisions, the bank increased the target multiple applied in its valuation from 33x to 34x and enlarged the premium to front-end from 15% to 20%. Those multiple changes contributed to the new $306 price target.
Despite acknowledging that "the structural story is strengthening, with test intensity breaking above historical ranges," Morgan Stanley left its Equalweight rating in place. The bank noted that Teradyne "is now trading at the highest multiple in our SPE coverage," a point it used to temper its recommendation despite the brighter outlook.
Other broker updates followed Teradyne’s recent earnings release. Cantor Fitzgerald raised its price target to $330 from $270 while maintaining an Overweight rating, citing strong guidance for the first quarter of 2026. Cantor also highlighted the growing importance of artificial intelligence to Teradyne’s revenue mix, noting AI comprised more than 60% of the company’s revenues in the fourth quarter of 2025 and is expected to exceed 70% in early 2026.
Stifel raised its target to $325 from $280, pointing to momentum in AI-driven applications within the semiconductor test business. Northland, by contrast, downgraded Teradyne to Market Perform even as it lifted its target to $270, explicitly citing valuation concerns for the change in rating.
In another note, Cantor Fitzgerald reiterated a $270 price target while highlighting Teradyne’s earnings-per-share run-rate. The firm reported an EPS run-rate of roughly $8.00 between the fourth and first quarters, compared with market expectations of $5.52 for 2026 and $7.49 for 2027.
Collectively, these analyst actions underscore how AI-related demand and networking growth are reshaping forecasts for Teradyne, while also producing differing views among firms on appropriate valuation levels given the stock’s elevated multiple.
Key developments:
- Morgan Stanley raises target to $306 and boosts FY26 and FY27 revenue and EPS forecasts based on stronger networking growth.
- Multiple brokerages update targets and ratings after Teradyne’s earnings release, with some emphasizing AI-driven revenue gains and others flagging valuation risks.
- Teradyne’s stock has rallied strongly over the past year and is trading near its 52-week high.