Lattice Semiconductor: Macro Headwinds Catching Up, These Analysts Charge Into Q3 Print, Q4 Guide

Lattice Semiconductor Corp LSCC tanked in early trading on Tuesday, after the company reported its third-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

KeyBanc Capital Markets On Lattice Semiconductor

Analyst John Vinh maintained an Overweight rating while reducing the price target from $110 to $80.

Although Lattice Semiconductor reported its third-quarter results in line with expectations, it lowered the fourth-quarter guidance, Vinh said in a note.

“LSCC attributed weakness in its outlook to softening demand in comm infra, industrial, and automotive end markets,” which was offset by “improving demand in traditional and AI servers,” the analyst stated.

“Avant remains on track to contribute initial revenues in 4Q and continue to ramp over the next several years,” he added.

Stifel On Lattice Semiconductor

Analyst Ruben Roy reiterated a Hold rating while cutting the price target from $82 to $70.

Macro headwinds are catching up with Lattice Semiconductor, Roy stated in a note.“Towards the end of 3Q, demand for products slated for Industrial and Automotive end market applications weakened, a trend that LSCC expects to continue into 4Q,” he wrote.

“As well, consistent with peers, LSCC noted communications infrastructure headwinds, both in wireline and wireless end markets,” the analyst added.

Needham On Lattice Semiconductor

Analyst Quinn Bolton reaffirmed a Buy rating while trimming the price target from $90 to $75.

“In hindsight, we should have waited until after earnings to launch coverage as the weak macro environment finally caught up to LSCC and overcame the company's strong, new-product story,” Bolton wrote in a note.

The midpoint of its fourth-quarter revenue guidance is “more than 10% below our prior forecast, and quarterly revenue likely to remain subdued through C1H24,” he added.

Concerns around further estimate cuts “are likely to overhang LSCC's shares until the company can restore sequential growth driven by new products,” the analyst further stated.

Check out other analyst stock ratings.

Susquehanna On Lattice Semiconductor

Analyst Christopher Rolland reiterated a Positive rating while reducing the price target from $95 to $75.

“Management suggested Industrial demand began to soften in the last few weeks of the quarter and extended into 4Q,” Rolland wrote. “It was initially localized to Asia, but then expanded to include Europe as well, prompting a meaningful sequential decline for the segment,” he added.

The analyst further mentioned that Lattice Semiconductor could “significantly outperform peers, particularly on the ramp in Avant next year.”

Benchmark On Lattice Semiconductor

Analyst David Williams maintained a Buy rating and price of $70.

“After 14 consecutive quarters of revenue growth, margin expansion, and solid execution, LSCC’s fourth quarter guidance missed expectations by a wide margin,” Williams said.

“Beyond the near-term challenging macro environment, the business remains healthy with design win momentum in Nexus and Avant families providing confidence in the longer-term growth trajectory,” he added.

“With few competing solutions and tailwinds returning next year, the firm is well positioned with a differentiated portfolio of solutions and a value-added, ASP accretive, software stack,” the analyst further wrote.

LSCC Price Action: Shares of Lattice Semiconductor had declined by 16.01% to $56.52 at the time of publication Tuesday.

Photo: Shutterstock