UPDATE: Evercore Group Initiates Coverage on Monolithic Power Systems with Overweight Rating, $46 PT on Potential Good Things Ahead

In a report published Wednesday, Evercore Group analyst Michael Lucarelli initiated coverage on Monolithic Power Systems MPWR with an Overweight rating and $46.00 price target. In the report, Evercore Group noted, “We initiate with an Overweight rating and $46 PT. We think the best is yet to come as Monolithic Power (MPS) is on the cusp of revenue catalysts across higher margin, stickier markets (server, comms, industrial, auto) that should: (1) deliver annual double-digit revenue growth (all organic) that easily outpaces peers, (2) structurally lift GMs, (3) deliver leverage, and (4) support additional S/H returns. We expect positive estimate revisions ahead with a line of sight to $2 of EPS as these drivers take hold. MPS's current and future successes hinge on its superior process technology (BCD3/4/5) and ongoing innovations (monolithic power modules, QSMod) that enable a higher level of integration and better efficiency. This has also allowed MPS to enter these new markets and to contend in competitive markets without sacrificing margins. After outperformance in 2013 shares have basically tracked Semis YTD at +9%, and we think risk reward is favorable at current levels.” Monolithic Power Systems closed on Tuesday at $37.93.