UPDATE: Feltl and Company Upgrades Cirrus Logic to Strong Buy, Reiterates $54 PT
In a report published Monday, Feltl and Company upgraded its rating on Cirrus Logic (NASDAQ: CRUS) to Strong Buy, and reiterated its $54.00 price target.
Feltl and Company noted, “We think CRUS shares are attractive trading at ~12x our CY2013 non-GAAP EPS estimate of $3.11. We believe revenue/earnings growth over the next few quarters could drive shares higher. We derive our $54 price target by applying a 17.5x multiple to our CY2013 non-GAAP EPS estimate of ~$3.11. CRUS's AAPL supplier/Audio IC peers ADNC/WLF.LN/DLG.GR trade at different multiples, but along with our semiconductor comp forward average P/E multiple, provide data supporting our current assigned CRUS forward P/E multiple. Based on forward P/E multiples CRUS appears undervalued relative to WLF.LN/DLG.GR. DLG.GR currently trades at forward P/E multiple ~15x, while WLF.LN currently trades at forward P/E ~34x. Our overall semiconductor comp forward average P/E ~18x is higher than our projected CRUS multiple. While we believe CRUS growth prospects are likely significantly higher relative to semiconductor comps, customer concentration concerns likely warrants some discount. Given the potential for strong near-term revenue/earnings growth, slightly offset by customer concentration concerns, we think CRUS deserves a slightly discounted forward P/E multiple relative to our overall comp semiconductor group.”
Cirrus Logic closed on Friday at $38.22.
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