Stifel raises Semtech stock price target to $45, maintains Buy

On Wednesday, Stifel analysts increased their price target on Semtech Corp . (NASDAQ:SMTC) shares to $45 from $42, while reiterating a Buy rating on the stock. According to InvestingPro data, analyst targets for SMTC (NASDAQ:SMTX) range from $43 to $68, with the stock currently trading at $38.78. Despite a challenging six-month period that saw a 39.6% decline, the stock has shown recent momentum with strong returns over the last month. The revision follows Semtech’s recent financial performance, which aligned closely with Stifel’s estimates. The company reported first-quarter fiscal year 2026 (April) revenue and non-GAAP earnings per share (EPS) that were slightly above Stifel’s expectations by 0.4% and $0.01, respectively.

The firm also provided guidance for the second quarter of fiscal year 2026 (July), with revenue and non-GAAP EPS midpoints marginally higher than Stifel’s previous estimates, again by 0.4% and $0.01, respectively. The analysts noted the continued momentum in infrastructure growth, despite a temporary setback in the analog communications components ( ACC (NSE:ACC)) business. InvestingPro analysis reveals that while the company isn’t currently profitable, with a -$2.26 EPS in the last twelve months, analysts expect positive earnings of $1.70 per share in fiscal year 2026. The company maintains strong liquidity with a current ratio of 2.07, indicating solid short-term financial health.

Semtech’s next-generation ACC products, branded as CopperEdge, have been garnering significant interest due to their capability to deliver longer reach lengths at higher speeds compared to the first-generation solutions. These products can reach lengths of 5 meters and 3 meters at speeds of 800G and 1.6T, surpassing the 1.1-meter reach of earlier versions.

The report also highlighted contributions from other segments, with growth drivers including LoRa technology in applications such as robotics, unmanned aerial vehicles (UAVs), and smart buildings, as well as proximity sensors used in smart glasses and SurgeSwitch devices.

Stifel anticipates an improvement in Semtech’s non-GAAP operating margins, projecting an increase from 16.4% in fiscal year 2025 to 18.9% in fiscal year 2026 estimates, and further to 20.2% in fiscal year 2027 estimates. Non-GAAP EPS growth is expected to outpace revenue growth by approximately two times in fiscal year 2027 estimates. The analysts concluded by maintaining their Buy rating and adjusting the 12-month price target to $45, based on 3.9 times the calendar year 2026 estimated enterprise value to sales ratio. InvestingPro subscribers can access additional insights through the comprehensive Pro Research Report, which includes detailed analysis of Semtech’s financial health, valuation metrics, and growth prospects among 1,400+ top stocks covered by the platform.

In other recent news, Semtech Corporation reported its financial results for the first quarter of fiscal year 2026, surpassing earnings and revenue expectations. The company achieved an adjusted earnings per share (EPS) of $0.38, slightly exceeding the forecasted $0.37, while revenue reached $251.1 million, surpassing the anticipated $250.09 million. Despite these positive results, Semtech’s stock experienced a decline in after-hours trading. The company projects net sales for the second quarter of 2026 to be $256 million, with a margin of plus or minus $5 million. Semtech continues to focus on AI connectivity and LoRa technology, with expectations for growth in the infrastructure market. Additionally, Needham and Company noted the company’s strong performance in the IoT cellular business, which is expected to accelerate in the coming quarters. The company also remains committed to strategic investments in research and development to drive future growth.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.