Raymond James Downgrades Semtech, Cites Disappointing Preannouncement

In a report published Thursday, Raymond James analyst J. Steven Smigie downgraded Semtech SMTC from Strong Buy to Outperform and lowered the price target from $36.00 to $26.00. Raymond James commented on Semtech's disappointing preannouncement. The company noted ongoing delays in carrier capex spending with a great impact in China, Europe, and North America, and a six-month push-out of a new mobile consumer platform. Smigie noted weakness in communications and consumer, with communications such as 100G seeing less traction. On a positive note, the analyst reported that Semtech "still has numerous potential drivers in the intermediate-term and long-term in its technology-leading protection devices, its Gennum product portfolio for data center, and its traditional analog areas like power." Semtech revised guidance to be in the $120-130 million range. The company expects pro-forma EPS to fall within $0.18-0.24 and net revenue to be within $132-144 million. Pro-forma earnings are expected to be with $0.29-0.37 range. Raymond James cut their FY13 revenue and EPS estimate from $606 million to $593 million, and $1.29 to $1.18. The analyst also lowered FY14 revenue and EPS estimates from $640 million to $580 million, and $1.76 to $1.35. Semtech closed at $28.07 on Wednesday and shares are currently trading down 10.65% at $25.08.