Needham & Company Downgrades Xilinx (XLNX) to Hold
Needham & Company analyst N. Quinn Bolton downgraded Xilinx (NASDAQ: XLNX) from Buy to Hold.
The analyst comments "XLNX's F4Q19 results were in-line to slightly better than Street estimates. However while F1Q20 revenue guidance was above Street consensus, GM guidance was well below the Street's estimates. Solid F4Q19 results were driven by continued strength in the Wireless Comms business, which accounted for all of the F4Q19 growth in Comms as the Wired business was slightly down Q/Q. While Comms growth has been impressive, we are concerned XLNX's valuation multiple may compress due to risks including a deceleration in Wireless Comms reflecting the encroachment of baseband ASICs, the potential for inventory corrections should 5G deployments outside of Korea be delayed and the decline in GM in F1H20. As a result, we are downgrading XLNX shares to Hold from Buy and moving to the sidelines until the multiple compression risks can be mitigated."
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Shares of Xilinx closed at $126.70 yesterday.