Entegris Inc (ENTG.O): Preview: How Much Can Gross Margins Expand?

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Entegris Inc (ENTG.O): Preview: How Much Can Gross Margins Expand?

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20 Jul 2026 17:15:31 ET │ 11 pages

Entegris Inc (ENTG.O)

Preview: How Much Can Gross Margins Expand?

CITI'S TAKE

Buy ENTG reports Jun-Q results before the market open on 8/4. We believe

investors' focus this quarter is on: 1) Upside to the MSI outlook of mid-to- Price (20 Jul 26 16:00) US$133.79

high single digits expectation (Citi models +8%/+10% growth for Target price US$170.00

CY26/27); 2) Continued efforts on gross margin improvement and Expected share price return 27.1%

priorities of the new CFO Sukhi Nagesh; and 3) Competition. We Expected dividend yield 0.3%

have previously analyzed gross margin upside from better factory Expected total return 27.4%

utilization, and we believe improving operational efficiency could drive

Market Cap US$20,403M additional gross margin expansion to catch up with peers (see Figure 1).

Citi models Jun-Q largely inline with Street estimates and Sep-Q modestly

above on better GM. We keep our TP of $170 and maintain Buy.

Elizabeth Sun, CFAAC

Pre-quiet period conversation - We came away more constructive on the +1-212-816-3308

company's gross margin potential. While the factory rationalization is paced with elizabeth.sun@citi.com

demand outlook, the company is not slowing down the initiatives to improve yield Atif Malik

and performance at the facilities. Management pointed out that there is significant +1-415-951-1892

amount of portfolio that is already well above corporate gross margins while several atif.malik@citi.com

product lines still have room to close the gap, which would push total gross margins

higher, and on top of which KSP and Colorado are underutilized. So there is a lot

opportunity and the improvement will continue into 2027 and beyond, and the