UBS Says Linear Technology Corp. (LLTC) Appears Stable Despite Headwinds - Reiterates Sell
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Rating Summary:
1 Buy, 16 Hold, 2 Sell
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Today's Overall Ratings:
Up: 11 | Down: 13 | New: 18
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UBS reiterated a Sell rating on Linear Technology (NASDAQ: LLTC), and cut the price target to $39.00 (from $41.00), following the company's 2Q earnings report. Overall, Linear's business appears stable despite macro headwinds, and likely remains somewhat defensive given end market and customer diversity. All segments other than computing saw q/q growth, but automotive was particularly strong and continues to be aided by increased content in hybrid/electric vehicles.
Analyst Stephen Chin commented, "We maintain a Sell rating on Linear despite its persistent bookings and sales trends in an uncertain macro environment, as we are cautious of the 20%+ premium at which the stock trades relative to analog peers. Linear reported in-line Dec-15 results and guided Mar-16 sales +3.5% q/q, which was in-line with expectations but likely came as a relief to the market given pervasive concerns of a weak macro environment. While trends in early 2016 do look good for Linear, such as accelerating bookings momentum and healthy inventory levels, management did remain cautious and highlighted that the macro environment does appear relatively fragile. As such, we are cautious on Linear's Mar-16 guidance as well as growth for the next 2-3 quarters, given that other semis companies have seen China and macro weakness which could still pose a headwind for Linear. However, we note that Linear continues as one of the best-managed companies in the industry, evidenced by its best-in-class GM of 75.7%, which improved 60 bps q/q despite sales only growing 1.5%."
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 $41.13 yesterday.
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