RBC Capital Remains Sidelined on Maxim Integrated Products (MXIM) Following In-Line Quarter Results

RBC Capital reiterated a Sector Perform rating and $35.00 price target on Maxim Integrated Products (NASDAQ: MXIM) following the company's 2Q earnings report. MXIM reported an inline Dec-qtr but guided Marqtr below expectations citing lower Samsung unit expectations. MXIM reported results that met Street expectations with revenues and EPS of $510.8M and $0.32 vs. Street at $505.0M and $0.32. Revenues were slightly above expectations, driven by y/y growth in Auto, offset by declines in all of the other segments.

Analyst Amit Daryanani commented, "MXIM reported an inline Dec-qtr but guided Marqtr below expectations citing lower Samsung unit expectations, while most segments ex-Computing are expected to be up strongly q/q. Given -13% decline in backlog we think visibility is getting impeded (risk is this is beyond consumer segment as well). Positively, the cost containment story remains intact ($180M in annual cost savings) and gross margins could reach mid-60% in 2+ years (though we need a higher revenue base likely). Given a ~4% dividend yield, and cost containment story we suspect the stock reaction could be muted despite rev/EPS guide down. All in, while we think the EPS power is compelling ($2.60+ annually), we think the path to get there will be curtailed due to revenue and customer specific challenges. Maintain SP."

For an analyst ratings summary and ratings history on Maxim Integrated Products click here. For more ratings news on Maxim Integrated Products click here.

Shares of Maxim Integrated Products closed at $31.03 yesterday.

You May Also Be Interested In

• Tesla touts acceleration of new models, but Q1 results fall short of estimates
• GameSquare Holdings Inc (GAME) PT Lowered to $5 at Roth/MKM
• Eastgroup Properties (EGP) Tops Q1 EPS by 17c, provides guidance