Integrated Device Technology (IDTI) PT Lifted to $25 at Brean Capital
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Brean Capital analyst Mike Burton reiterated a Buy rating and raised his price target on Integrated Device Technology (NASDAQ: IDTI) to $25.00 (from $23.00) following in-line results.
Burton commented, "IDTI reported a relatively in-line Sep-16Q and gave mixed guidance for the Dec-16Q. For the December 2016 guide, the company is being impacted by the Samsung Note 7’s recall, and is divesting a small less profitable business. While the Samsung development is disappointing, we still have conviction in the IDTI story as the company is pushing through this rough patch and executing particularly well on the margin and cost side of its business model. This gives us more confidence that the company can reach its operating margin target of 30% by midyear CY17 despite the reduced revenue forecast. On the product side, we believe the company has some exciting opportunities in the wireless charging market as well as new areas of growth in Automotive (ZMDI) and in environmental sensing. We are reiterating our Buy on shares of IDTI and raising our TP to $25 based on a 16x P/E multiple on our CY17E EPS estimate. We believe a 16.3x multiple is warranted given the better margin profile of the company and future strong product cycles the company will be participating in, such as Intel's (INTC $34.87, Buy) Skylake product ramp as IDTI appears to have a dominant market share lead given the designs the company has already won."
Shares of Integrated Device Technology closed at $20.71 yesterday.
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