Story updated at 10 a.m. to reflect market activity.
Shares of Maxim gained 0.6% to $32.69 in morning trading.
The firm maintained it's "buy" rating for the stock. Analyst Ian Ing also raised EPS estimates for Maxim, given better smartphone and industrial trends.
"Maxim is expected to report 3QFY14 earnings on April 24. We are raising our estimates and 12-month price target on MXIM from $33 to $36.20," Ing wrote. "We have improved expectations on smartphone secular growth via positive trends in flagship content, China OEMs, and overall Samsung inventory replenishment. We also note that MXIM has valuation support given ~7% free cash flow yield, of which 133% has been returned to shareholders in the prior eight quarters. We like the stock here on improving fundamentals throughout CY14."
Separately, TheStreet Ratings team rates MAXIM INTEGRATED PRODUCTS as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MAXIM INTEGRATED PRODUCTS (MXIM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 2.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MAXIM INTEGRATED PRODUCTS's return on equity exceeds that of both the industry average and the S&P 500.
- Despite currently having a low debt-to-equity ratio of 0.43, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.77 is very high and demonstrates very strong liquidity.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- MAXIM INTEGRATED PRODUCTS's earnings per share declined by 42.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MAXIM INTEGRATED PRODUCTS increased its bottom line by earning $1.52 versus $1.17 in the prior year. This year, the market expects an improvement in earnings ($1.63 versus $1.52).
- You can view the full analysis from the report here: MXIM Ratings Report