Semtech Corp (SMTC) Shares Surge 4.46% to $50.83, Analysts Forecast Average Target Price of $55.50

Semtech Corp (SMTC) shares surged 4.46% on Jul 17, reaching $50.83, up from $48.66. The stock is 36.08% below its 52-week high and 111.35% above its 52-week low. Analysts forecast an average target price of $55.50, implying a 9.19% upside, with a high estimate of $68.00 and a low estimate of $43.00. The average brokerage recommendation is 2.1, indicating "Outperform" status. GuruFocus estimates the GF Value for SMTC in one year to be $29.06, suggesting a 42.83% downside from the current price.

Semtech Corp (SMTC) shares surged 4.46% on July 17, reaching $50.83, up from $48.66. The stock is currently trading 36.08% below its 52-week high of $79.52 and 111.35% above its 52-week low of $24.05 [1]. The surge in Semtech's stock price was driven by a combination of positive analyst sentiment and strong financial performance.

Analysts have forecast an average target price of $55.50 for Semtech, implying a 9.19% upside from the current price. The high estimate is $68.00, while the low estimate is $43.00. The average brokerage recommendation is 2.1, indicating "Outperform" status [1]. Additionally, GuruFocus estimates the GF Value for Semtech in one year to be $29.06, suggesting a 42.83% downside from the current price [1].

CFRA recently raised its price target on Semtech to $65 from $45, while maintaining a Buy rating on the semiconductor company’s stock. CFRA cited expectations for potential CopperEdge wins in coming quarters that could drive multiple expansion for the shares, which currently trade at a discount to peers at about 25 times FY27 earnings [2]. CFRA's new target represents a price-to-earnings ratio of 30.4 times its FY27 earnings estimate of $2.14, which remains below both semiconductor peers and Semtech’s own historical averages of 33.5x and 32.4x over five and ten years [2].

Semtech reported strong financial results for the April quarter, with revenue reaching $251.1 million and earnings per share (EPS) at $0.38, slightly surpassing consensus estimates. The company’s guidance for the upcoming quarter predicts continued positive performance, with projected sales of $256 million and an EPS of $0.40, again slightly exceeding market expectations [2]. Piper Sandler and Benchmark have both maintained positive outlooks on Semtech, with price targets set at $55 and $68, respectively, citing strong quarterly performance and promising future guidance. Stifel has raised its price target to $45, reflecting confidence in Semtech’s growth trajectory, particularly in infrastructure and technology segments [2].

Semtech’s Annual Meeting of Stockholders resulted in the approval of an amendment to its 2017 Long-Term Equity Incentive Plan, increasing shares available for award grants by 2.1 million. The company also amended its bylaws to reflect current Delaware law and provide guidelines for stockholder proposals [2]. Susquehanna has maintained a Positive rating with a $60 price target, highlighting growth in Semtech’s product areas, including potential collaboration with NVIDIA (NASDAQ:NVDA) [2]. Semtech’s management remains focused on debt reduction, having prepaid $25 million of term loan principal by July, achieving an adjusted net leverage ratio below 2 [2].

References:
[1] https://www.gurufocus.com/news/2985485/semtech-corp-smtc-trading-446-higher-on-jul-17
[2] https://www.investing.com/news/analyst-ratings/semtech-stock-price-target-raised-to-65-from-45-at-cfra-93CH-4142411