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On Thursday, KeyBanc Capital Markets reiterated its Overweight rating on Lattice (OTC:LTTC) Semiconductor (NASDAQ:LSCC) shares with a steady price target of $75.00. According to InvestingPro data, eight analysts have recently revised their earnings estimates upward, with price targets ranging from $58 to $85. KeyBanc’s analysis centers on Lattice Semiconductor’s expected organic revenue growth and the potential strategic moves under the company’s new executive leadership.
Lattice Semiconductor, which recently welcomed CFO Lorenzo Flores, is believed to be on track for a U-shaped recovery in the near term, with long-term revenue growth projections of 15-20% remaining unchanged. The appointments of CEO Ford (NYSE:F) Tamer and CFO Flores have signaled that the company may have broader ambitions, potentially eyeing strategic acquisitions. The company’s strong financial health score and low debt-to-equity ratio of 0.03 suggest capacity for strategic moves.
Flores brings a wealth of experience from his previous roles as the CFO of Xilinx (NASDAQ:XLNX), his tenure at Intel, and his work with private equity at Kioxia. According to KeyBanc, his background suggests that Lattice Semiconductor is considering the acquisition of Altera, a subsidiary of Intel Corporation (NASDAQ:INTC). The deal, which Intel reportedly values between $9 billion and $12 billion, would likely require Lattice Semiconductor to seek financing partners.
KeyBanc estimates that the acquisition could lead to an earnings per share (EPS) accretion in the range of $1.10 to $1.60. Despite the challenges of securing a deal of this magnitude, the research firm maintains its positive outlook on Lattice Semiconductor, emphasizing the potential benefits of such a strategic move.
In other recent news, Intel Corp . is in exclusive negotiations with Silver Lake Management to sell a majority stake in its Altera unit. This potential deal is part of Intel’s broader strategy to revitalize its business. Meanwhile, Lattice Semiconductor has been the subject of several analyst updates following its recent financial performance. CFRA increased its price target for Lattice from $48 to $66, maintaining a Hold rating, while TD Cowen raised its target from $65 to $75, maintaining a Buy rating. Benchmark also upped its target from $55 to $65, citing strong product momentum, and Stifel adjusted its target from $65 to $70, reaffirming a Buy rating. Lattice’s fourth-quarter results showed a decline in sales by 31%, with a notable drop in the industrial and automotive sectors, but its Communications & Computing segment remained stable. Analysts have noted Lattice’s improving backlog and strategic positioning, with expectations of revenue growth in the coming years. The company maintains a solid financial position, with net cash of $136 million and no debt, which supports its long-term growth prospects.
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