UPDATE: International Rectifier Rebounds After Citi Upgrade
In a report published Friday, Citi Investment Research analyst Terence Whalen upgraded International Rectifier (NYSE: IRF) from Neutral to Buy and assigned a $33.00 price target.
International Rectifier reported revenue of $269.9 million versus Citi's $268 million estimate. Management announced March quarter revenue guide of $270 million, above Citi's $268 million estimate but below the Street's $271.4 million.
Whalen noted 3 main points contributing to the upgrade including, “1) 500bps of additional gross margin expansion through 2014 on manufacturing restructuring, 2) continued broad based industrial and auto demand recovery in 2014 (IRF's .95 correlation is the 2nd highest correlation to ISM in the analog sector), and 3) our sector-wide valuation thesis which favors core analog names with industrial exposure over heavily exposed smartphone names on multiple expansion. IRF's power management products have 60% exposure to industrial and auto markets.”
Citi raised C14 revenue from $1.1 billion to $1.14 billion and EPS from $0.86 to $1.11. The analyst reported on the company's near-term expectation of a boosting GM through the start-up of the Singapore facility in June 2014 and the additional $11 million in OpEx savings in mid-2015.
International Rectifier fell to $24.87 in trading on Thursday, closing at $25.64. Shares are currently up 2.18% at $26.20.
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