KeyBanc: Synaptics Is Diversified, Has Smart Home Opportunities

Synaptics, Incorporated SYNA was upgraded by KeyBanc Capital Markets after the firm's analysts met with the human interface developer's partners and competitors at CES 2018 in Las Vegas. 

The Analyst

KeyBanc analyst John Vinh upgraded shares of Synaptics from Sector Weight to Overweight with a $60 price target.

The Thesis

Synaptics' smart home opportunity — not only with Amazon.com, Inc. AMZN and Alphabet Inc GOOGLGOOG, but also with Asian operators — is appreciable, Vinh said in a Thursday note. (See the analyst's track record here.) 

The upgrade comes after KeyBanc met at CES with Synaptics supply partners and competitors, the analyst said. 

Synaptics is well-positioned with in-display fingerprint sensing, given the limited competition, Vinh said.

The analyst saw a full reveal of Vivo's smartphone at CES with a demo of its sensor performance and said he's confident on follow-on design wins, as Vivo's smartphone uses a rigid display. 

Winning SAMSUNG ELECTRONIC SSNLF with the Note 9 looks less certain now, as Synaptics has chosen to come to the market with a Chinese OEM first, Vinh said. The analyst projects that Synaptics can bid and compete for the socket later this year.

Synaptics is less dependent on a single product opportunity than it has ever been, and therefore can return to growth and achieve $2 billion by 2020.

KeyBanc raised its estimates for Synaptics, a move Vinh said reflects the firm's increased confidence in the company's ability to return to growth; in-display fingerprint sensing; a chip on film DDIC opportunity at Apple Inc. AAPL and other OEMs; and smart home and IoT.

The Price Action

Synaptics shares have lost about 20 percent over the past year.

The stock was up 11.34 percent at $48.88 early in Friday's trading session. 

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Photo courtesy of Synaptics. 

Posted In: fingerprint sensorsJohn VinhKeyBanc Capital MarketsSmart HomesmartphonesAnalyst ColorUpgradesPrice TargetAnalyst RatingsTech

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