Lattice Semiconductor's Avant Ramps Likely To Drive Margins, Analysts Say Post 4Q

Benchmark analyst David Williams maintained a Buy on Lattice Semiconductor Corp LSCC and raised the price target from $65 to $95.
LSCC's product and design win funnel continue gaining momentum despite the macro weakness and inventory correction impacting the broader semi-industry.
The portfolio strength remains the driver of sales growth, while relentless execution supports record fundamentals.
Although gross margin durability has recently been a pain point for semiconductors, Lattice delivered 70% in 4Q and saw further room for expansion.
With twelve consecutive quarters of sequential improvement (+1040 bps), the analyst was comfortable that the gains would be sustainable with tailwinds as the Avant platform ramps.
Core end market demand is performing well, with channel inventories remaining lean with strategic builds of internal inventory to support upcoming product launches.
Automotive and Industrial continued to demonstrate healthy growth, with over half of revenue from the segment.
Combined with Comms and Computing, core end markets represented 91% of total revenue.
The analyst views LSCC as a compelling story with favorable exposure to long-term growth markets with limited downside on weaker consumer and computing dynamics.
With few competing solutions and tailwinds strengthening across the business, LSCC is well positioned with a differentiated portfolio of solutions and a value-added, ASP accretive software stack.
KeyBanc analyst John Vinh maintained an Overweight and raised the price target from $80 to $100.
LSCC reported strong 4Q results, slightly above expectations, and 1Q guidance, which beat.
Strength was attributed to design wins ramping in auto and industrials, which offset weakness in the data center.
Most notably, management indicated that Avant design wins are "far exceeding" Nexus simultaneously after launch.
Finally, supply constraints continue to ease as BS inventories increase, while lead times are beginning to ease.
Price Action: LSCC shares traded higher by 7.19% at $88.64 on the last check Tuesday.

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