Silicon Labs Analyst Downgrades Stock Citing Demand Slowdown, High Valuation

Needham analyst Rajvindra Gill downgraded Silicon Laboratories, Inc SLAB from Buy to Hold.
For the past several months, he had been concerned about slowing consumer demand adversely affecting the Home and Life segment (46% of sales).
For Q4, he estimated Home and Life would decline 17% Q/Q after seven quarters of sequential growth.
As lead times come in, he expected an acceleration in order push-outs leading to outright cancellations.
His CY23 estimates factored a slowdown in home automation products like smoke alarms, security systems, smart lighting, cameras, hubs, and appliances.
He believed there could be added pressure if there is a slowdown in the housing market (residential and commercial) and if the consumer weakness spills over into enterprise spending.
Despite the contraction in valuation multiple, SLAB traded at a premium.
Keybanc analyst John Vinh maintained an Overweight and lowered the price target from $180 to $160.
Morgan Stanley analyst Craig Hettenbach maintained an Equal-Weight and lowered the price target from $161 to $151.
Barclays analyst Blayne Curtis maintained an Underweight and lowered the price target from $95 to $85.
Price Action: SLAB shares traded lower by 3.18% at $114.05 on the last check Thursday.

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