Oppenheimer Believes Semtech (SMTC) Still Has Room to Grow

In a report released today, Rick Schafer from Oppenheimer assigned a Buy rating to Semtech (NASDAQ: SMTC), with a price target of $50. The company’s shares closed yesterday at $45.30, close to its 52-week high of $45.50.

Schafer wrote:

“SMTC reported upside F1Q (April) earnings sales/EPS of $151.0M/$0.47, just above consensus $150M/$0.46. Mgmt guided F2Q (July) to $161M/$0.54 also comparing favorably with the Street’s $160M/$0.53. Growth was led by core LoRa, DC and protection (~2/3 of 2018 revenue). SMTC achieved record Sensing booking and turns to make the mid-point of revenue a modest 34% vs. 39% posted in F1Q. SMTC ended 2017 with 50M LoRa nodes deployed, and added 10M in F1Q, putting the company on track to hit 80M-plus by EOY. Management highlighted a LoRa revenue generation funnel opportunity that exceeds $400M. We remain long- term buyers of this emerging growth/GM story with a $50 price target.”

According to TipRanks.com, Schafer is a top 100 analyst with an average return of 16.8% and a 72.4% success rate. Schafer covers the Consumer Goods sector, focusing on stocks such as NXP Semiconductors, Skyworks Solutions, and Texas Instruments.

Currently, the analyst consensus on Semtech is Strong Buy and the average price target is $50.29, representing an 11.0% upside.

In a report issued on May 21, B.Riley FBR also reiterated a Buy rating on the stock with a $46 price target.

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Semtech’s market cap is currently $3B and has a P/E ratio of 82.36. The company has a Price to Book ratio of 4.51.

Based on the recent corporate insider activity of 181 insiders, corporate insider sentiment is neutral on the stock.

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Semtech Corp. engages in the manufacture and supply of analog and mixed signal semiconductor products for high-end consumer, enterprise computing, communications, and industrial equipment. Its offers signal integrity, protection, wireless and sensing, and power and high-reliability products.