Semtech (SMTC) Received its Third Buy in a Row

By Ryan Adsit

After Piper Jaffray and Robert W. Baird gave Semtech (NASDAQ: SMTC) a Buy rating last month, the company received another Buy, this time from Oppenheimer. Analyst Rick Schafer maintained a Buy rating on Semtech today and set a price target of $60. The company’s shares closed on Wednesday at $45.44.

Schafer commented:

“SMTC reports F3Q(Oct) earnings the close. We see an in line set up, though a negative bias to outlook reflecting persistent macro uncertainty and early stage group correction. F4Q(Jan) estimates are $173.1M/ $0.61 and $167.5M/$0.57, respectively. We reduced SMTC estimates following TXN’s earnings last month. Since, we’ve heard most HPA peers echo TI’s cautious tone. We expect SMTC led again by LoRa, though DC, protection and PON could be sources of relative softness. Investor sentiment on the group has soured and we expect the group to remain under pressure until macro uncertainty improves and/or estimates are de-risked. Near term aside, we like SMTC’s growth/GM profile led by LoRa, DC and protection (combined ~2/3 of sales). We reiterate Outperform and $60 target.”

According to TipRanks.com, Schafer is a top 100 analyst with an average return of 13.0% and a 64.6% success rate. Schafer covers the Consumer Goods sector, focusing on stocks such as Akoustis Technologies, Skyworks Solutions, and Texas Instruments.

Semtech has an analyst consensus of Strong Buy, with a price target consensus of $58.29, implying a 28.3% upside from current levels. In a report issued on November 16, Robert W. Baird also reiterated a Buy rating on the stock with a $50 price target.

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Based on Semtech’s latest earnings release for the quarter ending July 31, the company reported a quarterly net profit of $25.17 million. In comparison, last year the company had a net profit of $13.34 million.

Based on the recent corporate insider activity of 152 insiders, corporate insider sentiment is negative 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. It offers signal integrity, protection, wireless and sensing, and power and high-reliability products.