Semtech stock price target raised to $65 from $45 at CFRA

Investing.com - CFRA raised its price target on Semtech Corp . (NASDAQ:SMTC) to $65 from $45 while maintaining a Buy rating on the semiconductor company’s stock. The stock, currently trading at $53.69, has shown strong momentum with a 56.7% return over the past year, according to InvestingPro data.

The research firm cited expectations for potential CopperEdge wins in coming quarters that could drive multiple expansion for the shares, which currently trade at a discount to peers at about 25 times FY27 earnings. This outlook is supported by 8 analysts recently revising their earnings estimates upward, as tracked by InvestingPro.

CFRA’s new target represents a price-to-earnings ratio of 30.4 times its FY27 earnings estimate of $2.14, which remains below both semiconductor peers and Semtech’s own historical averages of 33.5x and 32.4x over five and ten years.

The firm maintained its earnings estimates of $1.65 per share for fiscal year 2026 and $2.14 for fiscal year 2027, with no changes to these projections.

CFRA expects Semtech to benefit from rising AI workload demand in data centers, growth in LoRa-enabled industrial solutions, and increased revenue from passive optical network and base station markets, while margin expansion should come from portfolio optimization, AI efficiencies, and scale benefits.

In other recent news, Semtech Corporation reported strong financial results for the April quarter, with revenue reaching $251.1 million and earnings per share (EPS) at $0.38, slightly surpassing consensus estimates. The company’s guidance for the upcoming quarter predicts continued positive performance, with projected sales of $256 million and an EPS of $0.40, again slightly exceeding market expectations. Piper Sandler and Benchmark have both maintained positive outlooks on Semtech, with price targets set at $55 and $68, respectively, citing strong quarterly performance and promising future guidance. Stifel has raised its price target to $45, reflecting confidence in Semtech’s growth trajectory, particularly in infrastructure and technology segments.

Semtech’s Annual Meeting of Stockholders resulted in the approval of an amendment to its 2017 Long-Term Equity Incentive Plan, increasing shares available for award grants by 2.1 million. The company also amended its bylaws to reflect current Delaware law and provide guidelines for stockholder proposals. Additionally, Susquehanna has maintained a Positive rating with a $60 price target, highlighting growth in Semtech’s product areas, including potential collaboration with NVIDIA (NASDAQ:NVDA). Semtech’s management remains focused on debt reduction, having prepaid $25 million of term loan principal by July, achieving an adjusted net leverage ratio below 2.

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