Jefferies Says Now's A Great Time To Buy Semiconductors

Following up on their recent TMT Conference in Miami, analysts at Jefferies released a report with the key takeaways from five big semiconductor names that were present at the conference. Overall, analysts liked what they saw from the conference and are bullish on the sector.
Advanced Micro Devices Inc AMD
AMD CFO Devinder Kumar told Jefferies that the company is seeing improving visibility in its core business and is confident that it will meet its target of 15 percent improvement in sales numbers in the second half of 2015 compared to the first half of the year. Kumar also expects that new products, such as Pro Graphics and “Zen” will provide margin growth moving forward. Jeffries has a Buy rating on AMD.
Microchip Technology Inc MCHP
Microchip Technology CFO Eric Bjornholt told Jefferies that the company expects to continue to gain share in the MCU market and sees a continuing environment of growth ahead. Jefferies has a Buy rating on Microchip Technology.
NXP Semiconductors NV NXPI
NXP’s CFO Peter Kelly told Jefferies that an announcement on the sale of the company’s Power Amp business could be coming in the next couple of months. Once a deal is complete, NXP can re-focus on its capital return program. Jefferies forecasts $10 per share earnings for NXP by 2018 and has a Buy rating on the stock.
ON Semiconductor Corp ON
ON CFO Bernard Gutmann echoed the company’s recent earnings call by highlighting strong late-2015 order numbers and downplaying the impact of forex headwinds. Jefferies has a Hold rating on ON.
Texas Instruments Inc TXN
Texas Instruments’ IR Brandon Hodge explained that the company’s focus is on growing free cash flow (FCF) and returning it to shareholders. The company intends to pay dividends at a rate of 50 percent of its four-year FCF average. Jefferies had a Buy rating on Texas Instruments.