Expect Multiple Tailwinds To Drive Maxim Integrated's Beat And Raise Quarter

Maxim Integrated Products, Inc. MXIM is scheduled to report its fiscal Q3 2017 results on April 20.

Maxim reported an EPS and revenue beat in Q2. EPS came in at $0.46, versus the estimate of $0.44, while revenue came in at $551 million, versus the estimate of $542.69 million. Following these results, several analysts had raised their views on the company:

• Macquarie initiated coverage of the company with an Outperform rating.
• While maintaining a Buy rating, Drexel Hamilton raised the price objective from $46 to $52.00.
• Royal Bank of Canada upped their price objective from $40 to $45.
• Stifel Nicolaus increased the price target from $44 to $50, while maintaining a Buy rating.
• Jefferies upped the price target from $44 to $49, and reiterated a Buy rating.

Related Link: Maxim's PMIC Reduces Solution Size By 50% for Wearable Medical and Fitness Applications

Expectations for Q3

The Street expectations are for an EPS of $0.52 on revenues of $575.29 million. In a note Thrusday, Betsy Van Hees of Loop Capital said Maxim Integrated could report another quarterly beat, backed by “healthy demand in the automotive, communications & data center, and industrial end markets.”

With these tailwinds likely to continue into Q4, the company may announce better-than-expected guidance for the quarter. Naming Maxim Integrated as “one of our top mid-cap picks,” the analyst mentioned that the company appeared poised for continued sequential growth in earnings and revenue due to:

• Consumer diversification, beyond smartphones
• Increased market share gains
• Ongoing transformation in manufacturing

Van Hees reiterates a Buy rating on the company, while raising the price target from $50 to $51.