In a report released today, Rajvindra Gill from Needham maintained a Buy rating on Tower Semiconductor (TSEM), with a price target of $21. The company’s shares closed yesterday at $16.89.
Gill said:
“TowerJazz extended its manufacturing agreement with Panasonic Semiconductor Solutions (PSCS) for three more years, taking effect in the second quarter of 2019. This agreement is similar to its previous 5-year agreement with PSCS, with the major difference being the lower pricing structure. Due to a lower pricing structure, TSEM expects a roughly $20MM revenue reduction per quarter and a negative impact to gross margin. However, we expect it to offset the revenue and margin impact through operational improvements and cost efficiencies, coupled with the ramp in 300mm utilization rates at the Uozo fab and growth in SiGe, power management and sensors.”
According to TipRanks.com, Gill is a 5-star analyst with an average return of 10.0% and a 53.8% success rate. Gill covers the Consumer Goods sector, focusing on stocks such as Sequans Communications S A, Smart Global Holdings Inc, and Everspin Technologies Inc.
Tower Semiconductor has an analyst consensus of Moderate Buy, with a price target consensus of $21.
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Tower Semiconductor’s market cap is currently $1.67B and has a P/E ratio of 12.45. The company has a Price to Book ratio of 1.45.
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Tower Semiconductor Ltd. engages in the manufacture of integrated circuits. the firm operates through the TowerJazz brand. Its process platforms include SiGe, BiCMOS, mixed-signal/CMOS, radio frequency complementary metal-oxide semiconductor, CMOS image sensor, integrated power management, and micro-electromechanical systems.
