Street Calls of the Week
Investing.com - Oppenheimer upgraded Semtech Corp. (NASDAQ:SMTC) from Perform to Outperform and established a price target of $81.00, representing significant upside from the current price of $61.98. According to InvestingPro data, analysts maintain a strong buy consensus with targets ranging from $53 to $76.
The upgrade follows management meetings with investors last week, where Semtech CEO Hong Hou outlined strategic growth opportunities led by Active Copper Cable and Linear Pluggable Optics technologies for data center AI applications.
Oppenheimer highlighted increased adoption of Semtech’s LoRa technology, noting that enhanced functionality is expanding its use into new growth areas including drones, robotics, and automation. The firm also pointed to growth in proximity sensing technology (PerSe), particularly in wearables such as Meta Ray-Ban Display.
The research firm noted that Semtech’s legacy handset protection business is posting sustained double-digit percentage growth through content and market share wins, believed to be led by Apple.
Oppenheimer identified the potential divestiture of Semtech’s non-core cellular module business, which generates approximately $200 million annually with 20% gross margins, as a likely future catalyst that could significantly improve the company’s overall gross margins to over 60%.
In other recent news, Semtech Corp. has been the focus of several analyst reports following its latest financial results. Benchmark has raised its price target for Semtech to $76.00 from $68.00, maintaining a Buy rating, citing a strategic transformation discussed at their recent conference. UBS has reiterated its Buy rating with a $65.00 price target, noting that Semtech’s quarterly results were in line with expectations and highlighting potential in AI connectivity for data centers by 2026. Craig-Hallum also increased its price target to $62.00 from $55.00, emphasizing the company’s strong position in the AI data center market and future growth prospects with new technology deployments.
Benchmark, in another note, maintained its Buy rating and $68.00 price target after Semtech reported 20% annual growth and modest upside to consensus estimates for revenue and earnings per share. Piper Sandler raised its target to $65.00 from $55.00, following what it called a "beat and raise quarter" for the company’s July results and future outlook, driven by strength in the FiberEdge business. These developments reflect a positive sentiment among analysts regarding Semtech’s future performance, with a focus on its strategic moves and growth in data center opportunities.
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