Nomura Securities Maintains a 'Neutral' on Linear Technology (LLTC); 4Q First Look

Nomura Securities maintains a 'Neutral' on Linear Technology (NASDAQ: LLTC) price target of $27.00.

Analyst, Romit Shah, said, "Linear reported FQ4 results of $294mn in revenue and $0.39 in EPS that slightly beat our forecasts of $294mn/$0.38. More important, the company is guiding for seasonal growth of 4-8% qoq versus our forecast of 4% growth and a 10-year average of 6%. The bears may argue that guidance is not conservative and that valuation is expensive at 17x annualized FQ3 EPS guidance of $0.42-0.44. Although our rating is Neutral, we believe that a combination of trough earnings, improving comps and 500+ bps of operating leverage should support a high teens multiple. Furthermore, the read-through for the analog group is positive. In this arena, Avago (Nasdaq: AVGO)(Buy) is our top pick. Linear trades at 17x FQ3 guidance (annualized) and 4.6x enterprise value to sales versus a five-year low of 4.0x and average of 6.2x."

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

Shares of Linear Technology closed at $29.87 yesterday.

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