Baird analyst Tristan Gerra this morning cut his rating on Lattice Semiconductor (LSCC) to Neutral from Outperform, trimming his price target to $5, from $8.
The downgrade follows yesterday’s weak Q3 results from the chip maker, with revenue and profits both missing Street expectations. Lattice is projecting Q4 revenues will be down 2%-7% sequentially.
Gerra notes that the guidance suggests a third consecutive quarter in which the company will under-perform rivals Altera (ALTR) and Xilinx (XLNX). He thinks the biggest issue for the maker of field programmable gate arrays is that it has more limited R&D resources than its rivals, “resulting in a wider gap between new FPGA family introductions than the competition.”
Meanwhile, Morgan Stanley analyst Mark Lipacis issued a “tactical” buy rating on the stock, asserting that the stock should outperform the overall chip industry over the next 60 days. “This is because the stock has traded off recently, making short term valuation much more compelling,” he writes, adding that with $2 a share in cash, downside in the stock is limited.
LSCC is down 11 cents, or 2.5%, to $4.35; the stock is down 15% over the last four days.
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