UPDATE: Citigroup Reiterates Buy Rating, Lowers PT on Semtech

In a report published Friday, Citigroup reiterated its Buy rating on Semtech

, but lowered its price target from $34.00 to $31.00. Citigroup noted, “SMTC traded flat Thursday after reporting +10% qq July growth Wednesday evening but guiding Oct-Q flat qq versus our prior +8% expectation. Notables points from the result were: a) 40G/100G traction drove 28% qq growth in communications, b) Gennum revenue came in at $35M as expected, and c) SMTC saw orders improve in August after a softer July bookings month. We reduce our estimates and trim our target to $31 from $34. While many investors are skeptical of Gennum's growth rate, we thought it was interesting that management stated Gennum's enterprise business could grow mid-teens the next several years, above the 11% CAGR we project for SMTC revenue from C12-C15. We reiterate SMTC Buy and continue to view communications related growth as the main stock driver.” Semtech closed on Thursday at $24.76.