Tower Semiconductor (TSEM): Cheap Ahead of Catalysts - Drexel Hamilton

Drexel Hamilton analyst, Cody Acree, reiterated his Buy rating on shares of Tower Semiconductor (NASDAQ: TSEM) noting that shares are trading at 9x 2017 EPS and 10x his estimate for FY17 Free Cash Flow of $1.89.

The analyst sees 3 announcements that could reignite investor interest in the story:
1) Fab Acquisition or joint venture: Expansion similar to its Maxim San Antonio fab acquisition, where the fixed costs are covered by the prior fab owner.
2) China Expansion: A Chinese analog foundry partnership, where Tower receives immediately accretive service fees and retains a local 300mm manufacturing footprint.
3) MEMS Expansion of Vertical Market Participation: TSEM may look to acquire a dedicated underutilized MEMS facility that has an installed customer to cover fixed costs.

No change to the price target of $28.

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

Shares of Tower Semiconductor closed at $19.16 yesterday.

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