UPDATE: Citigroup Reiterates Buy Rating, Raises PT on Freescale Semiconductor
In a report published Wednesday, Citigroup reiterated its Buy rating Freescale Semiconductor (NYSE: FSL), and raised its price target from $15.00 to $18.00.
Citigroup noted, “After missing 4 of the last 6 quarters, Freescale guided 1Q13 sales above consensus, returning to positive y/y growth after 6 quarters of consecutive decline. Freescale's comments mirror those of several of their peers, adding conviction that cyclical recovery is nigh. Noting that the average trough-to-peak recovery in quarterly revenues is 26%, an eventual return to profit (~$950M in sales), normal utilization rates ($1.05B), and therefore higher gross margin (>45%) seems likely. With deleveraging an incremental opportunity, we suspect conviction in Freescale's earnings leverage will also grow. We reiterate our Buy rating and increase our PT to $18, based on our usual valuation methodology.”
Freescale Semiconductor closed on Tuesday at $12.39.
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