On Tuesday, Lattice (OTC:) Semiconductor (NASDAQ:LSCC) saw its price target adjusted by Benchmark, with the firm setting a new target of $80.00 while keeping a Buy rating on the stock. This revision comes in the wake of LSCC’s fourth-quarter results and the company’s first-quarter guidance, which indicated a more significant downturn than expected.
Benchmark highlighted that Lattice Semiconductor’s first-quarter guidance showed a considerable downside, which, although in line with the broader trend of industrial market deterioration this earnings season, was more substantial than anticipated. Despite this, the firm believes the company’s conservative outlook could mitigate the need for further revisions, with the potential for upside if there is even a modest improvement in demand.
The report also noted that Lattice Semiconductor’s channel inventory remains relatively healthy, with the rebalancing mainly occurring at the customer level. Visibility, however, continues to be limited. The expectation is that inventory clearing may continue through the first half of the year.
Encouraging signs were identified in the growth opportunities for Lattice Semiconductor, particularly in AI-related applications. The company generated over $100 million in revenue from this sector in FY23 and projects a doubling over the next few years. Additionally, the momentum in the design win pipeline was underscored, with Avant design activity significantly surpassing that of Nexus during the same period after launch.
Benchmark concluded that despite the near-term headwinds, the long-term fundamentals and growth trajectory of Lattice Semiconductor remain solid. The firm suggests that the current share weakness may present a buying opportunity for investors.
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