UBS Maintains a 'Buy' on Silicon Labs (SLAB); Lower Estimates, PT as Weak Optical, TV End Demand Reduces Growth Outlook

UBS maintains a 'Buy' on Silicon Labs (NASDAQ: SLAB) price target lowered from $48 to $43.

UBS analyst says, "SLAB 3Q sales guidance for down 5-10% q/q (vs our prior +8% estimate) is the result of slow trends in the optical networking and TV markets that in turn are causing slower demand/inventory digestion in both its timing chips and TV tuners respectively. However, we believe this is probably a transitory event and expect a rebound in 4Q. Nevertheless, we lower our estim
ates for 2011 as well as out years and our PT to $43 from $48. We maintain our Buy rating, as we look for strong Broad-based segment growth beyond 2011 to stay largely intact at +30% y/y."

"We lower our sales/non-GAAP EPS estimates for 3Q by 15%/34% to $117m/$0.38 and for 2011 by 7%/15% to $489m/$1.73. For F2012/13, we lower our sales estimates by 9% to $563m/$659m and EPS estimates by 13%/12% to $2.30/$2.95."

For more ratings news on Silicon Labs click here and for the rating history of Silicon Labs click here.

Shares of Silicon Labs closed at $36.19 yesterday.

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