Microsemi (MSCC): Improving Fundamentals and Cash Flow Warrant Higher Multiple - Needham & Company

Needham & Company analyst N. Quinn Bolton reiterated a Buy rating and lifted his price target on Microsemi Corporation (NASDAQ: MSCC) to $63.00 (from $52.00) on an improving fundamental outlook and cash flow, whcih warrants a higher multiple.

Bolton commented, "We reiterate our Buy rating and are increasing our 12-month PT on Microsemi to $63 from $52 as we believe the combination of a strong fundamental outlook and increasing cash flow warrant a higher valuation multiple for the shares. We expect Defense spending to improve with the incoming administration, believe increasing investments from hyperscale cloud operators and the ramp of Intel's Purley server platform will drive growth in the company's storage business and see continued strong demand for the company's optical solutions. Additionally, with the PMC-Sierra acquisition now fully integrated, we expect F1Q17 (December) will mark the second consecutive quarter of strong cash flow and believe the company is on track to generate over $600MM of EBITDA and $400MM of FCF in FY17."

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

Shares of Microsemi Corporation closed at $52.95 yesterday.

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