FBR Capital Maintains Outperform, $26 PT on International Rectifier

FBR reiterates its Outperform rating and $26 price target on International Rectifier Corporation IRF as design win traction seems solid. FBR comments, “While still very early, we think calendar 1Q12 revenues can grow modestly given the meaningful channel inventory burn occurring now (and thus chip undershipment versus demand); however, gross margins could decline another 100–200 bps QOQ as current fab underutilization impacts weigh on next quarter's gross margins. Beyond the near term, IR has solid design win traction that we think could push quarterly revenues toward the $350M level (with gross margins likely in the high-30% range, operating margins could track near 15% and annual earnings near $2.25).” IRF closed at $19.86 per share on Thursday.