UPDATE: FBR Capital Markets Reiterates Outperform Rating, Raises PT on Fairchild Semiconductor International
In a report published Monday, FBR Capital Markets reiterated its Outperform rating on Fairchild Semiconductor International (NYSE: FCS), and slightly raised its price target from $16.00 to $17.00.
FBR Capital Markets noted, “Recent checks for Fairchild (FCS) suggest business trends are bottoming now, with some seasonal improvement likely in 1Q13 in industrial and automotive and with any future recovery in industrial demand likely to drive fab utilizations and gross margins higher. Indeed, we believe Fairchild's factory utilizations, driven primarily by its industrial business, are below 80% now, meaningfully hitting gross margins. Further, Fairchild is draining about $8M of inventory from its distributor channel in 4Q12 (almost three revenue points), with Fairchild's sell-in revenue recognition augmenting the natural highs and lows of the semiconductor cycle, giving Fairchild much operating leverage.”
Fairchild Semiconductor International closed on Friday at $13.55.
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Tags: FBR Capital Markets