UPDATE: Oppenheimer Upgrades Semtech Corp. (SMTC) to Outperform
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(Updated - December 1, 2016 9:12 AM EST)
Oppenheimer upgraded Semtech Corp. (NASDAQ: SMTC) from Perform to Outperform with a price target of $36. Analyst Rick Schafer thinks growth is on track.
"We are raising estimates and upgrading SMTC to Outperform after the company reported solid beat/raise results Wednesday. F3Q sales/EPS of $141M/$0.37 bested the Street’s $138M/$0.36, and guidance of $138M/$0.35 also beat consensus’ $134M/$0.33, despite a $4-5M Note 7 drag in F4Q (Jan). Following a couple of transition years, we believe SMTC’s legacy businesses (long-haul, Samsung Smartphone) has stabilized, allowing greenfield optical and LoRa opportunities to drive outsize revenue/earnings growth. At the same time, SMTC has lowered leverage below 2x, opening the door for strategic M&A. With Samsung risk minimized (midsingle digits % sales), favorable NT PON and BST trends, and LT optical, LoRa and wireless charging growth drivers, risk/reward looks favorable at current levels and are upgrading with a $36 target," said Schafer.
Shares of Semtech Corp. closed at $28.10 yesterday.
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