Feltl & Co Downgrades EZchip Semiconductor (EZCH) to Buy

Feltl & Co downgraded EZchip Semiconductor (NASDAQ: EZCH) from Strong Buy to Buy with a price target of $25.50 (from $31.00) following today's warnings.

Analyst Jeffrey Schreiner cited slower near-term growth profile reduces target, but still see long-term growth catalysts intact.

"We are reducing our 12-month price target to ~$25.50, down from ~$31, as we have reset our CY14 estimates based on EZCH’s announced reduction in its 3Q14 guidance, and lowered expectations for core EZCH/Tilera business in CY15," Schreiner said. "We believe prior long-term estimated growth catalysts, such as NPS, remain in place supported current and new customer adoption, along with the roughly ~$1B TAM expansion provided by Tilera. Prior inventory adjustments within EZCH have come, and gone. And while EZCH may be put in the “penalty box” by investors during the near-term, we expect the same with todays announced revision. Following the Tilera acquisition EZCH will still have over ~$6/share in cash. While catalysts may be “pushed out” we recommend investors continue to accumulate EZCH shares as we view long-term growth opportunities as undervalued."

For an analyst ratings summary and ratings history on EZchip Semiconductor click here. For more ratings news on EZchip Semiconductor click here.

Shares of EZchip Semiconductor closed at $24.73 yesterday.

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