Needham & Company Lifts Freescale Semiconductor (FSL) Price Target 75%

Needham & Company analyst Rajvindra Gill reiterated a Buy rating and boosted his price target on Freescale Semiconductor (NYSE: FSL) to $35.00 (from $20.00) on greater operating leverage and sustainable growth drivers.

Gill commented, "We are increasing our price target to $35 based on our higher conviction that FSL can repay its large debt balance through internal cash flow generation, which in turn should generate consistent earnings leverage as interest expense is reduced. Combined with FSL's favorable end markets -- automotive, industrial, China LTE infrastructure, & the burgeoning IoT market, we see significant leverage in the model (probably the best company in our universe for leverage). We model moderate revenue growth for 2015/2016 at 4-7% Y/Y yet we still forecast earnings leverage given our expectation for margin expansion and interest expense reduction. There could be upside to our revenue growth estimates given the market share gains in digital networking/RF, automotive content growth and IoT sales."

The firm maintained FY 2014 EPS at $0.31 and bumped FY 2015 EPS from $0.54 to $0.57. They also introduced 2016 ests of $5.13B/$2.30.

For an analyst ratings summary and ratings history on Freescale Semiconductor click here. For more ratings news on Freescale Semiconductor click here.

Shares of Freescale Semiconductor closed at $25.29 yesterday.

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