Shares of GlobalFoundries (GFS) are on the rise on Monday after several Wall Street analysts initiated coverage of the stock with mostly bullish ratings and a wide span of price targets. Bank of America analyst Vivek Arya started GlobalFoundries with a Buy rating and $88 price target as he believes the company is "uniquely positioned" to benefit as the number one U.S.-based outsourced chip manufacturer, or foundry, with no Taiwan/China footprint. Also initiating coverage of the name with an Outperform rating, his peer at Baird set a higher price target of $100 as he views the company's investment thesis as "very relevant within the semiconductor secular demand growth theme". 

'UNIQUELY POSITIONED': Bank of America analyst Vivek Arya initiated coverage of GlobalFoundries with a Buy rating and $88 price target, implying 40% upside potential. The analyst believes GlobalFoundries is "uniquely positioned" to benefit as the number one U.S.-based outsourced chip manufacturer, or foundry, with no Taiwan/China footprint. The company has only 10% share in a $70B addressable market opportunity across smart mobile devices, Internet of Things, automotive and data center, as well as "solid visibility and pricing power," Arya told investors.

Voicing a similar opinion, Jefferies analyst Mark Lipacis started GlobalFoundries with a Buy rating and $87 price target. As the leading trailing-node, analog/mixed-signal foundry, GlobalFoundries is benefiting from IoT demand drivers that will "translate to unit demand 10-times the size of cellphones" as well as a shift of its customers to a fab-lite model, Lipacis told investors. The analyst expects GlobalFoundries to maintain a premium valuation multiple given what he sees as dynamics that have led to "unprecedented levels of visibility and pricing power."

Setting a price target of $100 on the shares, Baird analyst Tristan Gerra initiated coverage of GlobalFoundries with an Outperform rating. The analyst views its investment thesis as "very relevant within the semiconductor secular demand growth theme" given the "most severe supply constraints in the technology supply chain in at least 20 years," geopolitical risks around wafer supply concentration, increasing demand for a variety of custom processes that are a foundation of GlobalFoundries' competencies and the company's own turnaround.

Meanwhile, Wedbush analyst Matt Bryson initiated coverage of GlobalFoundries with an Outperform rating and $75 price target. The analyst believes current IC shortages will continue creating a better outcome for foundries through 2022 into 2023. He also noted that GlobalFoundries' reorganization has improved the company's competitive positioning and cost structure, and business visibility has improved. Furthermore, Bryson sees the shift to 5G as only the beginning of a period of accelerated semi growth as a proliferation of IoT devices, greater automotive semiconductor content, and increased investment in data centers all drive higher semiconductor requirements.

JPMorgan analyst Harlan Sur also started GlobalFoundries with an Overweight rating and $80 price target. The analyst sees the company outpacing industry growth by up to two-times, driving 12% revenue growth annually for the next three years. Additionally, Needham, Raymond James, Citi and Credit Suisse also initiated coverage if GlobalFoundries with Buy-equivalent ratings.

ON THE SIDELINES: More cautious on the name, Morgan Stanley analyst Joseph Moore initiated coverage of GlobalFoundries with an Equal Weight rating and $67 price target. While the analyst views GlobalFoundries as "a substantial strategic asset" and a beneficiary of multiple important cyclical and secular trends in served foundry markets and of U.S. semiconductor policy, he believes near-term upside seems limited given the stock's post-IPO appreciation.

PRICE ACTION: In Monday morning trading, shares of GlobalFoundries have gained about 8% to $66.93.