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On Tuesday, KeyBanc Capital Markets adjusted its outlook on Lattice (OTC:LTTC) Semiconductor (NASDAQ:LSCC), reducing the price target from $75.00 to $70.00, while still maintaining an Overweight rating on the stock. The adjustment follows the company’s recent financial updates and management’s commentary on inventory levels. According to InvestingPro data, LSCC’s stock has shown resilience with an 8.73% gain over the past week, despite trading at a relatively high P/E ratio of 120.8x.
Lattice Semiconductor reported first-quarter results that aligned with expectations and provided second-quarter guidance that matched forecasts. However, the company’s management indicated that normalizing channel inventory, particularly for industrial-related products, is taking longer than initially expected. Previously, it was anticipated that inventory levels would stabilize by mid-2025, but now it seems it will take a few more quarters. The company maintains strong financial health with a current ratio of 3.66 and operates with minimal debt, as revealed in InvestingPro’s comprehensive analysis, which includes 14 additional key insights available to subscribers.
Despite the slower than anticipated improvement in industrial demand, Lattice Semiconductor is still projecting low single-digit percentage revenue growth in 2025. This outlook is based on several positive indicators, including increased customer consumption, a higher backlog of orders, and sustained booking trends with a book-to-bill ratio remaining above one.
KeyBanc analysts find these improving cycle metrics encouraging, particularly as Lattice Semiconductor reaffirms its expectation that new products will account for a high-teens percentage of revenue in 2025. In light of these factors, KeyBanc has decided to slightly reduce its estimates and price target for Lattice Semiconductor, while reiterating its confidence in the stock with an Overweight rating.
In other recent news, Lattice Semiconductor has reported financial results for the first quarter of 2025, meeting expectations with earnings per share (EPS) of $0.22 and revenue of $120.15 million. Despite this alignment with forecasts, the company experienced a 15% year-over-year revenue decline, which has contributed to a cautious outlook. Management has reaffirmed their revenue growth target for 2025, although uncertainties surrounding tariffs could impact the business environment in the latter half of the year. Analyst firms Loop Capital and Needham have maintained their Buy ratings on Lattice Semiconductor, with price targets set at $75 and $70, respectively. Loop Capital noted a decrease in distribution inventory and an improvement in the book-to-bill ratio, suggesting potential revenue growth. Meanwhile, Needham highlighted Lattice’s increased customer usage and stronger backlog as positive indicators. The company continues to focus on expanding its presence in AI, robotics, automotive, and industrial markets, with new product revenue showing significant growth.
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