Canaccord Genuity: Analog Names to Rally on LLTC Guidance and Commentary
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Canaccord Genuity on Tech: Semi Devices and Related Hardware: Strong guidance and commentary from Linear Tech (Nasdaq: LLTC) should drive shares of analog semis higher, including ADI, FCS, and ISIL
Analyst Bobby Burleson said, "While we continue to expect estimate cuts for the group, investor confidence in shortly reaching an end to the current inventory correction has likely been boosted. We are most constructive on analog names with low PC exposure such as ADI, although we also like FCS’s aggressive distributor accounting and volatile margins for a strong bounce off of the bottom."
For Analog Devices (NYSE: ADI): "High industrial exposure, potential dividend increase - We continue to recommend Analog Devices given the potential for dividend increases, essentially no PC exposure, and a likely uptick in gross margin as industrial begins to recover late CQ1. While risk remains, we view CQ4 (ends Jan. 2012) as the likely bottom as end demand appears to have stabilized (inventory largely digested and under shipping demand)." (Reiterates a 'Buy', PT $38) (Revenue: Q4/C11E remains $665.0 million; EPS: Q4/C11E remains $0.48)
For Fairchild Semi (NYSE: FCS): "Aggressive play for recovery - We believe FCS is well positioned given its global sell-in revenue recognition policy to benefit from normalizing channel inventories following the recent correction that has distributors working down inventories to unsustainably low levels. Gross margins should see an uptick as utilization rates increase and industrial (32% of Q3 revs) begins to recover in late CQ1." (Reiterates a 'Buy', PT $15) (Revenue: Q4/C11E remains $360 million; EPS: Q4/C11E remains $0.17)
For Intersil (Nasdaq: ISIL): "Healthy dividend yield should support shares -
Despite Intersil’s high PC exposure (27% of Q3 revs) we maintain a positive view as we believe the company’s industrial business (27% of Q3 revs) may buck trends as it is driven by rear backup cameras and security, in contrast to weakness for autos and industrial at other analog suppliers. Tight cost controls and potential for atypical H1 seasonality in 2012
could partially offset near-term weakness, while a healthy dividend and take-out speculation create a floor for the shares." (Reiterates a 'Buy', PT $13) (Revenue: Q4/11E remains $166 million; EPS: Q4/11E remains $0.05)
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Analyst Bobby Burleson said, "While we continue to expect estimate cuts for the group, investor confidence in shortly reaching an end to the current inventory correction has likely been boosted. We are most constructive on analog names with low PC exposure such as ADI, although we also like FCS’s aggressive distributor accounting and volatile margins for a strong bounce off of the bottom."
For Analog Devices (NYSE: ADI): "High industrial exposure, potential dividend increase - We continue to recommend Analog Devices given the potential for dividend increases, essentially no PC exposure, and a likely uptick in gross margin as industrial begins to recover late CQ1. While risk remains, we view CQ4 (ends Jan. 2012) as the likely bottom as end demand appears to have stabilized (inventory largely digested and under shipping demand)." (Reiterates a 'Buy', PT $38) (Revenue: Q4/C11E remains $665.0 million; EPS: Q4/C11E remains $0.48)
For Fairchild Semi (NYSE: FCS): "Aggressive play for recovery - We believe FCS is well positioned given its global sell-in revenue recognition policy to benefit from normalizing channel inventories following the recent correction that has distributors working down inventories to unsustainably low levels. Gross margins should see an uptick as utilization rates increase and industrial (32% of Q3 revs) begins to recover in late CQ1." (Reiterates a 'Buy', PT $15) (Revenue: Q4/C11E remains $360 million; EPS: Q4/C11E remains $0.17)
For Intersil (Nasdaq: ISIL): "Healthy dividend yield should support shares -
Despite Intersil’s high PC exposure (27% of Q3 revs) we maintain a positive view as we believe the company’s industrial business (27% of Q3 revs) may buck trends as it is driven by rear backup cameras and security, in contrast to weakness for autos and industrial at other analog suppliers. Tight cost controls and potential for atypical H1 seasonality in 2012
could partially offset near-term weakness, while a healthy dividend and take-out speculation create a floor for the shares." (Reiterates a 'Buy', PT $13) (Revenue: Q4/11E remains $166 million; EPS: Q4/11E remains $0.05)
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