Needham & Company Raises price Target on Microsemi (MSCC) Following Analyst Day
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Needham & Company reiterated a Buy rating on Microsemi Corporation (NASDAQ: MSCC), and raised the price target to $52.00 (from $46.00), following the company's analyst day. Management is expecting business to grow organically at 6-8% to >$2bn in revenues by 2020 and announced an updated target model of 60%+ NG GM and 35% NG OM, vs. a its previous NG GM and NG OM targets of 60% and 30%, respectively.
Analyst Quinn Bolton commented, "Microsemi hosted an upbeat analyst day yesterday in New York. Not only did the company increase its long-term target financial model but also management highlighted several key areas of growth including storage and data center, Ethernet, precise timing ICs, OTN processors, aerospace and FPGAs. With several identifiable revenue growth drivers, we have increased confidence Microsemi will be able to meet its target organic revenue growth of 6%-8% per year. Additionally, with management committed to delevering the balance sheet and unlikely to pursue major additional acquisitions in the near-term, we expect MSCC to show significant FCF over the next several quarters. Reflecting increased confidence in the company's prospects, we increase our 12-month PT to $52, or an EV of 3.75x CY18 sales, from $46. We reiterate our Buy rating."
Shares of Microsemi Corporation closed at $40.73 yesterday.
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