In a report released today, Rajvindra Gill from Needham maintained a Buy rating on Tower Semiconductor (TSEM), with a price target of $17. The company’s shares closed on Friday at $14.18, close to its 52-week low of $13.56.
Gill observed:
“We are lowering our estimates to reflect our near-term concerns around the smartphone RF segment (~20% of sales) and the effects of the new Panasonic agreement. We forecast lower revenue for the smartphone RF segment in 1H19 given weak results from SWKS & QRVO. Also, we are reducing our Pasnonic revenue by ~$60MM to reflect lower dollar revenue from the new agreement (same quantities, but lower pricing tables). Our GM estimates also decline by 400bps to 22% from 26% to reflect the inclusion of higher fixed costs from the new Panasonic agreement. While our revenue and GM estimates decline, the lower MI and tax rate lead EPS to decline to $1.20 from $1.65. With $3 net cash per share, we see value for shares in the $17-range, and hence keep the Buy.”
According to TipRanks.com, Gill is a 5-star analyst with an average return of 11.3% and a 53.3% success rate. Gill covers the Consumer Goods sector, focusing on stocks such as Everspin Technologies Inc, Smart Global Holdings Inc, and Adesto Technologies Corp.
Currently, the analyst consensus on Tower Semiconductor is a Strong Buy with an average price target of $22.50.
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The company has a one-year high of $35.40 and a one-year low of $13.56. Currently, Tower Semiconductor has an average volume of 733.7K.
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Tower Semiconductor Ltd. engages in the manufacture of integrated circuits. Its products include semiconductors and integrated circuits used in consumer electronics, personal computers, communications, automotive, industrial, and medical device products. The company was founded in 1993 and is headquartered in Migdal Haemek, Israel.
