Baird Remains Bullish on Diodes (DIOD); Sees Gross Margin Recovery on Horizon

Baird maintained an Outperform rating on Diodes (NASDAQ: DIOD), and cut the price target to $25.00 (from $28.00), following the company's 4Q earnings report. Diodes reported 4Q PF EPS of $0.14, well above consensus estimates of $0.06. Revenue was reported at $214.4 million, which came in above the high end of guidance of $191-$209 million. Baird sees higher utilization rates as a Gross margin catalyst. However, estimates that it will take a few quarters for utilization rates to rise sufficiently from current 50-60% levels for management to shift to a higher mix.

Analyst Tristan Gerra commented, "Reiterating Outperform rating on Pericom accretion and gross margin expansion prospects. While it will likely take a few quarters for management to shift to a higher mix (once utilization rates rise sufficiently), significant channel inventory adjustments have already taken place, while Pericom offers significant mix improvement and cross selling opportunities, in our view."

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

Shares of Diodes closed at $18.57 yesterday.

You May Also Be Interested In

• Citi Upgrades United Microelectronics Corp (2303:TT) (UMC) to Buy 'with limited downside'
• Wayfair (W) PT Raised to $55 at TD Cowen
• BofA Securities Starts GE Vernova (GEV) at Neutral, 'Multiyear turnaround amid positive demand backdrop'