FBR Capital Raises Estimates And PT On Maxim Integrated Products

FBR Capital Markets has published a research report on Maxim Integrated Products (NASDAQ: MXIM) after the company reported pleasing earnings results and guidance yesterday, January 20.

In the report, FBR Capital writes "Maxim reported upside results and guidance Thursday, somewhat reaffirming our view that the firm is gaining share in a variety of markets, is doing so very profitably, and is still growing revenues even as lead times and bookings contract, consistent with our "soft-landing supercycle" thesis. Calendar 4Q revenues ($613M, –2% QOQ), gross margins (63.5%, +10 bps QOQ), and EPS were all a clean beat versus Street estimates. For calendar 1Q, Maxim guided revenues to $590M–$620M (–4% to +1% QOQ), three points of upside versus the Street, with strength in consumer (handsets and an LCD TV recovery) and industrial demand offset by weakness in computing. Regarding shares, we remain bullish on MXIM (despite the stock's recent run) and think the stock can work toward the mid $30s or better over time given the firm's high-margin model, its steady execution, and its share gain trends in handsets and smartphones, LCD TVs, automotive, industrial, and smart metering applications. Indeed, we think MXIM is the smart-money way to play smartphones and tablets at a meaningful P/E discount versus other tablet plays (12x on MXIM versus 20x on others), the firm's growthy acquisition strategy is interesting (Teridian and PHyworks), and shares are very inexpensive at a 12x P/E multiple (2011 including stock compensation)."

FBR Capital maintains its Outperform rating and has raised the price target from $31 to $33.

Maxim Integrated Products closed yesterday at $25.60.