Morgan Stanley Sees Xilinx Moving Past The Comms Weakness

In a report published Friday, Morgan Stanley analyst Joseph Moore reiterated an Overweight rating and $48.00 price target on Xilinx XLNX. In the report, Morgan Stanley noted, “Xilinx results should be a modest relief to investors,and we like the stock longer term. The company guided that communications would be weak, but it was weaker than we thought (down 19%, with weakness in both wireless and wired); this should ease investor concerns, as total comms revenues are below the levels predating the China Mobile build. Comms seems set to snap back as equipment is still being deployed. However, there was a large program in the aerospace and defense business (Industrial, aerospace and defense segment up 30% q/q,after several qtrs of weakness) that will fade by March. Macro trends and US Telco spending issues will continue to be a headwind, but we still see substantial upside next 12 months.” Xilinx closed on Thursday at $38.49.