BofA Upgrades IDTI to Buy; Has Higher Confidence In Growth

Bank of America’s Vivek Arya upgraded Integrated Device Technology Inc. IDTI from Neutral to Buy. Arya assigned a $26 price target.

Confidence has grown in the company with 15%-20% growth in data centers “plus upside with Intel’s 3D Xpoint” according to Arya. Intel Corporation's INTC 3D Xpoint is the cutting edge memory storage device Intel announced July 2015.

IDTI was mentioned earlier in the year in the same conversation with Apple Inc. AAPL when the tech giant mentioned wireless charging technology was in the works. Now with “Apple wireless charging (WC) design win out of the stock” new growth is expected through “wins at large China customers in 2017” Arya notes.

Integrated Device Technology leads the sector in wireless charging capabilities. Arya mentions “CY16/17 Street expectations for sales of $769mn/$803mn look more manageable, and spending is at a trough.” In addition he says “Skylake could accelerate Server upgrades in CY17” and drive growth above consensus. The company boasts “best-in-class 25% FCF margins, plus a 3% margin expansion” Arya explains. IDTI company “product diversity, FCF generation, and execution rivals larger-cap peers even though IDT is only a $2.8 billion SMidcap company.”

 Arya is confident “IDT is a very well managed analog/mixed-signal business in a rapidly consolidating sector.”

On the heels of Bank of America's upgrade shares of IDTI are trading at $20.50.