Deutsche Bank Bullish On Maxim Integrated Ahead Of Q2 Print

Ross Seymore of Deutsche Bank on Wednesday previewed

second quarter results and expects the company to report an in-line quarter but notes the company is poised to “bounce back” in calender year 2015 and 2016. Seymore estimates the company will earn $0.28 per share in the second quarter, two cents below the Street's consensus estimate. Revenue of $551 million is also below the Street's consensus estimate of $560 million. Gross margin is expected to decline 170 basis points quarter over quarter to 59.9 percent due to lower utilization. The analyst notes that the “conservative” expectations stem from continued

weakness. However, Seymore sees the company benefiting from upcoming product launch catalyst such

forthcoming Apple Watch product. In addition, the company will also benefit from secular themes such as EMV/NFC-enabled financial terminals. “After weathering heavy Samsung-concentration headwinds in CY13/14, we believe Maxim Integrated is poised to bounce back in CY15/16 with a more diversified end-market portfolio and improved profitability following its recent restructuring actions,” Seymore wrote. The analyst continues and states that the company should post “solid growth” and reach long-term profitability targets next fiscal year. Shares are Buy rated with a price target raised to $37 from a previous $30.