Street Calls of the Week
Investing.com - Stifel raised its price target on Semtech Corp. (NASDAQ:SMTC) to $57.00 from $54.00 on Tuesday, while maintaining a Buy rating on the semiconductor company’s stock. The new target represents potential upside from the current price of $51, with the stock trading between $24.05 and $79.52 over the past 52 weeks.
The firm cited Semtech’s "continued execution on its turnaround," noting the company has achieved an improved business profile with additional operating leverage potential through calendar year 2025 and beyond. InvestingPro data shows the company’s revenue growing at ~14% year-over-year, with a healthy current ratio of 2.53x indicating strong liquidity.
Stifel highlighted potential long-term catalysts for Semtech’s IoT business segment, including a higher mix of software and services revenues and the possibility to expand its low-power, long-range connectivity offering beyond LoRa technology. According to InvestingPro, analysts have revised their earnings estimates upward for the upcoming period, with 8 analysts expressing increased confidence in the company’s outlook.
The research firm also pointed to Semtech’s "significant strategic options," including possible divestiture of lower-margin businesses and potential tuck-in acquisitions, enabled by the company’s strengthened balance sheet and positive free cash flow generation.
Stifel believes recent cost restructuring and debt conversion have created "sufficient breathing room" for Semtech to navigate the current challenging environment, while management has multiple avenues to unlock synergies from its LoRa and Sierra Wireless acquisition.
In other recent news, Semtech Corporation reported its second-quarter fiscal 2026 results, surpassing analysts’ expectations. The company achieved a 20% year-over-year increase in revenue. Additionally, Semtech’s adjusted earnings nearly quadrupled compared to the same period last year. These results highlight the company’s strong financial performance and growth trajectory. The announcement was met with a slight increase in after-hours trading activity. The positive earnings report underscores the company’s ability to exceed market forecasts. Semtech’s recent financial achievements reflect its ongoing operational efficiency and market strategy.
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