UPDATE: Sterne Agee Maintains Buy on Microsemi, Lowers PT to $26
Sterne Agee reiterates Buy on Microsemi Corp. (NASDAQ: MSCC) but has lowered target price from $30 to $26 on Thailand floods and macro factors as diversification drives outperformance.
Sterne Agee comments, “STOCK SHOULD TRADE HIGHER FOR 3 REASONS. 1) Dec Qtr revenue guidance excluding Zarlink is down 8% Q/Q, with Thailand accounting for about 5% and the macro accounting for about 3%, which is much more resilient relative to its peers; and 2) with the Zarlink acquisition, Dec Qtr gross margin guidance gets reset to 54.0%-55.5% (down from 57.3% in the Sep qtr) and is expected to reach 60% by the back half of FY13. Microsemi's margin improvement track record suggests the target is very achievable.”
MSCC traded at $18.01 on Thursday's session close.
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