UPDATE: Credit Suisse Downgrades Maxim Integrated Products to Neutral, Lowers PT
In a report published Monday, Credit Suisse Group downgraded its rating on Maxim Integrated Products (NASDAQ: MXIM) from Outperform to Neutral, and lowered its price target from $34.00 to $31.00.
Credit Suisse noted, “We are downgrading MXIM to NEUTRAL from OUTPERFORM and lowering our TP to $31 from $34, as we expect a significant deceleration in the Handset market going forward. Handsets have represented ~100% of MXIM's growth since 2008 and now represent ~36% of total revenue (versus peers ADI/LLTC at ~1%) - a decelerating handset market would CLEARLY make it difficult for MXIM to continue its top-line outperformance (+6.1% CAGR since 2008 vs. Semis +4.0%). While we do NOT believe Handsets can be a significant driver of profitable growth for the industry longer term, we positively highlight that MXIM also has a solid Industrial/Comms base (~40% of rev) and a capital-light business model which should allow the company to generate solid FCF even in a no growth/modest margin degradation scenario; hence, our NEUTRAL rating.”
Maxim Integrated Products closed on Friday at $29.61.
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Tags: Credit Suisse Group