Oppenheimer Maintains Perform On Semtech Following Meeting With Top Management


In a research report published yesterday, Oppenheimer analyst Rick Schafer maintained a Perform rating on Semtech (NASDAQ:SMTC), following meetings with SMTC’s CFO, Emeka Chukwu, and Director of Business and IR, Sandy Harrison. No price target was assigned.

Schafer wrote, “Overall tone remains quite positive, as headwinds from its SerDes business are now behind the company and SMTC remains on track to return to Y/Y growth in 2H14. SMTC’s business is the most diversified it has been in years, with multiple growth drivers intact across its Comms, Data Center, Industrial and Consumer businesses. Mgmt remains confident it will reach $1B/yr in revenue in five years (vs ~$600M run-rate today), driven principally by organic growth (70-80% of total growth) with the balance coming from acquisitions (20-30%). Gennum continues to be a bright spot for SMTC as data center, broadcast (transition to 4K2K) and China BST buildouts drive strength in this high-margin business. Automotive continues to be a small portion of SMTC’s business, but mgmt expects steady growth over the next 2-3 years as sensors and protection design wins complement power mgmt business the company has today. While SMTC’s outlook continues to improve, and mgmt executes on its turnaround plans, risk/reward appears fairly balanced here.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Rick Schafer has a total average return of 8.6% and a 67.7% success rate. Schafer has an 19.2% average return when recommending SMTC, and is ranked #669 out of 3330 analysts.

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