Stifel analyst Tore Svanberg said he expects Q3 to come in essentially in line with expectations for analog and IoT semiconductor companies, but sees their Q4 outlooks being impacted by a potential supply-chain correction or slower end-market growth. He now believes 2019 will now be a down year, projecting a 2%-4% contraction, and sees companies aligned with strong secular growth stories as poised to outperform their peers. Svanberg identifies Monolithic Power (MPWR), Silicon Labs (SLAB), Semtech (SMTC) and Quantenna (QTNA) as among the companies he sees being aligned with strong secular growth stories. In conjunction with the sector preview, Svanberg lowered his price targets on Monolithic Power, Silicon Labs, Alpha & Omega (AOSL), Macom (MTSI), Maxim Integrated (MXIM), MaxLinear (MXL), NXP Semiconductors (NXPI), O2Micro (OIIM), Power Integrations (POWI) and Texas Instruments (TXN).

As previously reported, Summit Insights downgraded Silicon Labs to Hold from Buy. While stating that Silicon Labs' March quarter results and June quarter outlook "clearly support our view of a recovery from the industry downturn and inventory correction after an extended period of customers' double ordering," the firm also believes a recovery is now priced into the share price and expects the stock to be an inline performer.

TD Cowen analyst Joshua Buchalter raised the firm's price target on Texas Instruments to $175 from $160 and keeps a Hold rating on the shares. The firm said the print wasn't great but an important improvement and positive indicator on stability for the group. That said, numbers still need to move meaningfully higher to build medium-term valuation support or material buyback growth.

BofA raised the firm's price target on Texas Instruments (TXN) to $190 from $175 and keeps a Neutral rating on the shares. TI's small Q1 beat and inline but sequentially rising Q2 sales guidance, "while modest, potentially marks a recovery inflection in industrial chip demand," with positive read-across for U.S. peers such as Analog Devices (ADI), Microchip (MCHP), NXP Semiconductors (NXPI) and On Semiconductor (ON), the analyst tells investors. However, despite an expected recovery, TI's sustained high capex intensity could keep reported calendar year 2024-26 pro-forma EPS below $6 per share, the analyst added.

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