Deutsche Bank Cuts Price Target on Fairchild Semi (FCS) Due to New Q3 Outlook
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Price: $19.86 --0%
Rating Summary:
3 Buy, 12 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 13 | New: 19
Rating Summary:
3 Buy, 12 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 13 | New: 19
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Deutsche Bank is maintaining its Hold rating on shares of Fairchild Semi (NYSE: FCS) and is lowering its price target from $18 to $16 due to a decrease in the company's Q3 outlook.
The company cut its Q3 revenue guidance from $433-$446 million to $400-$410 million, which now represents a loss of 5-8 percent quarter-over-quarter. FCS also lowered its gross margin guidance slightly to 36-36.5 percent. The firm believes that the lower guidance reflect weakness in disty sell-through as well as
the company taking an approach to reducing channel inventory.
As a result of the company's new guidance, Deutsche is reducing its Q3 revenue and EPS estimates from $440 million and $0.40 to $400 million and $0.32. The firm also lowered its FY11 sales estimate from $1.73 billion to $1.64 billion and its EPS estimates from $1.60 to $1.40. For 2012, the firm now forecasts revenue of $1.7 billion with $1.45 in earnings.
An analyst at Deutsche comments, "We view FCS lowering its 3Q outlook as a reflection of softer macro demand and the need to reduce somewhat elevated inventory levels. We do not view this dynamic as FCS-specific, and expect a continuation of this type of news from the semi sector as 3Q comes to a close. While "taking the medicine" is an important prerequisite to our becoming more constructive on FCS, current macro challenges leave us patient."
For more ratings news on Fairchild Semi click here and for the rating history of Fairchild Semi click here.
Shares of Fairchild Semi closed at $12.48 yesterday.
The company cut its Q3 revenue guidance from $433-$446 million to $400-$410 million, which now represents a loss of 5-8 percent quarter-over-quarter. FCS also lowered its gross margin guidance slightly to 36-36.5 percent. The firm believes that the lower guidance reflect weakness in disty sell-through as well as
the company taking an approach to reducing channel inventory.
As a result of the company's new guidance, Deutsche is reducing its Q3 revenue and EPS estimates from $440 million and $0.40 to $400 million and $0.32. The firm also lowered its FY11 sales estimate from $1.73 billion to $1.64 billion and its EPS estimates from $1.60 to $1.40. For 2012, the firm now forecasts revenue of $1.7 billion with $1.45 in earnings.
An analyst at Deutsche comments, "We view FCS lowering its 3Q outlook as a reflection of softer macro demand and the need to reduce somewhat elevated inventory levels. We do not view this dynamic as FCS-specific, and expect a continuation of this type of news from the semi sector as 3Q comes to a close. While "taking the medicine" is an important prerequisite to our becoming more constructive on FCS, current macro challenges leave us patient."
For more ratings news on Fairchild Semi click here and for the rating history of Fairchild Semi click here.
Shares of Fairchild Semi closed at $12.48 yesterday.
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