MKS Instruments downgraded to Neutral from Buy at Citi

Citi downgraded MKS Instruments to Neutral from Buy with a price target of $120, down from $145. The firm updated its semiconductor equipment sector view and believes the equipment group is heading into a mid-cycle correction in the first half of 2025. While server artificial intelligence demand remains strong, consumer demand across PCs, smartphones, and auto “appears lackluster,” analyst tells investors in a research note. Citi says the downgrade of MKS aligns with its “Phase 3 sector view.” The company is well positioned to benefit from a recovery in photonics business and AI-driven design activities in advanced packaging substrates, but the downgrade reflects the push out of NAND market recovery, which it is over-indexed to, and the continued softness in the non-semi business including PCs and smartphones, the firm says.