TD Cowen Lowers Cognex Price Target, Cites Uncertainty Over Future Growth Model

TD Cowen analysts cut their price target on Cognex (NASDAQ:CGNX) to $30 from $38, while maintaining a Hold rating, as the company faces structural changes and evolving market dynamics that could impact long-term shareholder value.

The analysts noted that while Cognex possesses cutting-edge technology, its future business model may need to shift significantly from its historical approach. They emphasized the importance of reassessing valuation frameworks and determining whether the company can sustainably compound shareholder returns. Despite these challenges, TD Cowen acknowledged that Cognex’s valuation is approaching levels where investors may start seeing renewed confidence.

The analysts remain optimistic about logistics, viewing it as a key growth driver for Cognex moving forward. However, concerns persist around consumer electronics and automotive, which together account for nearly 40% of revenue. The consumer electronics segment (17% of sales) remains dependent on breakthrough materials or design changes, while the automotive sector (22% of sales) is expected to see weaker capital expenditures through 2026, making it less attractive in the near term.

TD Cowen pointed to Cognex’s Investor Day in June as a crucial event that could provide insights into the company’s strategic direction. The analysts updated price target reflects 30x estimated fiscal 2026 earnings per share, a valuation they still consider relatively high despite the stock’s recent decline.