Investors Love Xilinx's Q3 Earnings Beat

Xilinx, Inc. XLNX, a supplier of programmable logic devices including best known for inventing the field-programmable gate array and the first fabless manufacturing model, reported a top-and-bottom line beat in its fiscal third-quarter results. Here is a summary of how some of the Street's top analysts reacted to the print.

The Analysts

• Morgan Stanley's Joseph Moore maintains an Overweight rating on Xilinx with a price target lifted from $98 to $101.
• Bank of America's Vivek Arya maintains at Buy, price target lifted from $110 to $120.
• MKM Partners' Ruben Roy maintains at Neutral, fair value estimate lifted from $85 to $95.
• Raymond James' Chris Caso maintains at Market Perform.

Shares of Xilinx were trading higher by 9.2 percent at $97.80, which is above the stock's 52-week high of $95.18.

Morgan Stanley: Growth When Others Are Declining

Xilinx's earnings showed 34 percent year-over-year revenue growth at a time when its semiconductor peers are showing declining growth, Moore said in a research report.

The company continues to see momentum from holding a superior competitive positioning versus its peers in the 5G build cycle, integrated products that still offer higher functionality versus traditional FPGAs as Zynq products grew 80 percent year-over-year in the quarter, and continued adoption of FPGA/SoC/Board products in the Data Center market.

Bank Of America: 'Shield' From Macro Concerns

Arya said the case for turning bullish on Xilinx was made as the earnings print emphasized a superior growth profile versus its peers. Specifically, the company boasts direct exposure to some of the hottest semiconductor segments, including Data Center, 5G and self-driving cars. This will help "shield" the company from macro concerns that impact most of the semiconductor sector.

The research firm's revised $120 price target is based on 28 times calendar year 2020 PE which is a 20 percent premium to its peers and justified given the company's scarcity value.

MKM: Momentum Priced In

Xilinx is "clearly executing well" with recent momentum likely to continue over the longer-term, Roy said. The expectations for strong growth ahead are factored into the stock at its current multiple of 23 times 2019 estimated EPS, however, which is a premium to the group average of 15 times. The research firm's revised $95 fair value estimate is based on a 24 times 2019 multiple on 2019 estimated EPS.

Raymond James: 'Feel Dumb For Missing This Stock'

At a time of global slowdown in the semiconductor sector, Caso highlighted that Xilinx reported record revenue of $800 million.

"[B]oy do we feel dumb for missing this stock" as it's "clear the bulls were right," Caso wrote in the note. Nevertheless, it's difficult to justify buying the stock at its current "elevated valuation" of 23 times fiscal 2020 EPS given expectations for "lumpiness" in 5G deployment trials.

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