UPDATE: Citigroup Raises PT on Linear Technology Following June Quarter Report

In a report published Monday, Citigroup analyst Terence Whalen reiterated a Neutral rating on Linear Technology LLTC, and raised the price target from $38.00 to $44.00.

In the report, Citigroup noted, “LLTC stock is flat since reporting results on Tuesday 7/23 aftermarket. LLTC beat Jun-Q expectations and guided Sept-Q sequential sales in-line with Street estimates and above seasonality driven by continued growth in the industrial and auto end markets (60% of sales). We maintain our Neutral rating on LLTC because: a) gradual steady growth in the industrial and auto segments are likely, however in order to see substantial growth global macro conditions would need to accelerate into 2014; and b) LLTC trades at 17.9x 2014 P/E with a relative valuation to the S&P500 of 1.4x vs the analog average of 1.1x, we believe that there is room for the multiple to rise to 1.6x as money from the mobile supply chain rotates into more broad based analog stocks. We prefer ADI and MCHP as industrial heavy stocks that also consistently return +60% of FCF to shareholders, whereas LLTC returns ~25%.”

Linear Technology closed on Friday at $39.66.