Morgan Stanley Sees Growth in Core Markets as Intact for Linear Technology Corporation

In a report published Thursday, Morgan Stanley analyst Craig Hettenbach reiterated an Overweight rating and $54.00 price target on Linear Technology Corporation LLTC. In the report, Morgan Stanley noted, “Results were below expectations due to a drop in the non-core consumer business (2% of sales vs. 3% last quarter). This miss was further compounded by positioning in the stock—and broader analog group—that up until recently had been a beneficiary of flows out of high-flying tech stocks. We remain very positive on the growth drivers in its core industrial (43% of sales) and auto (20%) markets and as such are buyers of the pullback. In just 5 years, auto has increased from 9% of sales to 20% and significant growth in BMS should help drive this to 25%. On the flipside, we are disappointed in Linear's messaging of its capital structure (debt free), although even here we see potential optionality for cash returns.” Linear Technology Corporation closed on Wednesday at $45.07.