ATML Posts Inline Q4, GM Set To Expand

Analyst Craig Berger of FBR Capital Markets maintains his "outperform" rating on Atmel Corporation (NASDAQ: ATML). The target price for ATML is set to $5.50.

Atmel has reported inline results for Q4 with strength in microcontroller revenues and gross margins. However, ATML’s Q1 guidance indicates that the company is growing less robustly than its broad-based peers, the analyst says.

“Management remains focused on selling its Rousset, France fab, which should help gross margins meaningfully, and on ramping its touchscreen control maXTouch products with each of the top five handset OEMs,” the analyst mentions. “While visibility remains murky, and some investors' patience is wearing thin, we do believe Atmel's longer-term transition to being a higher-margin microcontroller firm remains on track and should eventually drive valuation multiple expansion,” FBR Capital Markets adds.