Analyst: Semtech Has Nearly 30% Upside

Analog and mixed-signal semiconductor maker Semtech Corporation SMTC, with its multiple-end-market target and strong growth profile, has managed to secure a Buy rating from BWS Financial.

The Analyst

BWS Financial analyst Hamed Khorsand initiated coverage of the shares of Semtech with a Buy rating and a $49 price target, suggesting nearly 30 percent upside from current levels.

The Thesis

Semtech's semiconductors, used for several applications, are in early-stage adoption, but its stock trades under the radar of many investors, Khorsand said in a Monday morning note.

The growth assumptions for Semtech are highly conservative, relative to the rate of demand of the end-market, Khorsand added. The analyst said his attraction to the company is the Internet-Of-Things (IoT) protocol LoRa, which is being deployed by many carriers across the globe. Semtech makes wireless chips for gateways and sensors for LoRa.

The firm's bullishness extends beyond the short-term, for the next 1-2 years. This is not, they noted, a play on third-quarter earnings, scheduled for Nov. 29.

The Price Action

Semtech shares have gained roughly 24 percent in 2017, trimming some of its 1-year gain of 41 percent.

Shares of Semtech closed Monday's trading at $39, up 0.9 percent. 

Related Links:

2 Up, 2 Down: Goldman Adjusts Semiconductor Stock Ratings

Mixed Views On A Hot Semiconductor ETF