MXIM To See Continuous Order Growth

Analysts at Citigroup maintain their "buy" rating on Maxim Integrated

, while raising their estimates for the company. The target price for MXIM is set to $20. MXIM is planning to expand its foundry capacity and pursue share gains through its analog integration strategy. “We remain buyers of MXIM due to its offensive traits: design prowess, larger block integration capability, share gains, and $500M+ FCF/yr; and defensive traits: 4.6% dividend yield, $2.78 net cash share, and attractive valuation with a 2.0x EV/S vs. 27.0% operating margin,” Citigroup says. The analysts mention, “MXIM sees continued order growth and upward pressure on lead times and doesn’t expect retrenchment until early-11. Strong demand in handsets, LCD TVs, financial terminals and smart meters should continue the next several Qs…. MXIM under-shipped demand $100M 1Q/2Q because of constraints – MXIM sees this mitigating customer overstocking risk… While MIXM’s guidance hasn’t yet included Teridian, we estimate Teridian can grow ~25% F10E-F14E based on top-down market estimates.” Citigroup has raised its EPS estimates for 2010 and 2011 from $0.99 to $1.06 and from $1.32 to $1.35, respectively.