Advanced Micro Devices (AMD) will get on the investor radar again when the company reports third-quarter earnings on Wednesday, October 24. AMD is up 130% year-to-date, and seems to be dealing with recent headwinds relatively well. However, BMO analyst Ambrish Srivastava points out that while the chip giant has done a decent job in executing on its road map, he believes the market overestimate the company’s ability to gain share and more importantly grow EPS and FCF.

As such, Srivastava reiterates a Market Perform rating on AMD stock, while lifting the price target to $20 (from $14), on acknowledgement that for a period the stock can trade at a higher multiple, especially given all the uncertainty at Intel. (To watch Srivastava’s track record, click here)

Srivastava stated, “While not taking anything away from AMD’s recent execution in its product roadmap and rollout of its products, particular on the CPU side, we believe the market is being overly optimistic in terms of what EPS and FCF share gains can drive for the company. We are below consensus for CY19 EPS. However, we also acknowledge that the stock can trade at a higher multiple for a period of time given uncertainty around its chief rival Intel’s roadmap and lack of leadership at the top.”

Ahead of the print, Srivastava predicts AMD will generate 3Q18 revenues of $1.70 billion, down 3% q/q and EPS of $0.12, in line with consensus. For 4Q18, the analyst expects revenues of $1.55 billion, down 9% q/q, and EPS of $0.08, vs. consensus of $1.59 billion, down 7% q/q and EPS of $0.11.

Overall, Wall Street is torn when it comes to whether to sing the chip giant’s praises or assess with an apprehensive gaze, as according to TipRanks, out of 24 analysts polled in the last 3 months, 10 are bullish on AMD stock while 11 remain sidelined, and 3 are bearish. With a potential upside of nearly 19%, the stock’s consensus target price stands at $28.27. (See AMD’s price targets and analyst ratings on TipRanks)