Bank of America downgraded Maxim Integrated Products Inc. MXIM Friday from Neutral to Underperform and maintained a $29 price target.
Analysts led by Vivek Arya made the downgrade as the stock exceeded the firm’s price target.
Arya saw “flattish sales, among the lowest in the [coverage] group, for 2015 and 2016. Valuation at ~20x 2015E PE is already stretched and we are not inclined to assign a higher multiple given the weak sales growth rate, and high exposure to volatile smartphone market.
The analysts liked “the company’s 3.6 percent dividend yield, among the best-in-class, and the company’s unique differentiation in analog integrated SoC, but we do not believe they compensate for the inconsistent execution and weak sales growth rate expectations.”
The price target was “based on 10.6x CY15E EV/EBITDA, inline with analog comps given sales volatility in smartphones/PCs.”
Maxim Integrated Products Inc. recently traded at $30.72, down 1.54 percent.
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