Morgan Stanley Discontinuing Coverage On Silicon Laboratories

According to Morgan Stanley, Silicon Laboratories (NASDAQ: SLAB) coverage is discontinued.

Morgan Stanley reported that effective immediately, it is discontinuing coverage of Silicon Laboratories because of a reallocation of resources. “All prior research on SLAB should no longer be relied upon. Our 2011 and 2012 base case EPS estimates are $1.85 and $2.25, respectively. Our base price assumption of $45 assumes a 20x P/E on 2011 EPS plus $8 cash per share. Despite the recent decrease in gross margins, we note SLAB's gross margins still exceed the low-50% / high-40% gross margins derived by the broader semiconductor industry, and consequently, we believe a slight premium is warranted.”

Silicon Laboratories closed yesterday at $41.79.