Needham analyst Rajvindra Gill downgraded Silicon Labs to Hold from Buy, citing the company's Q1 guidance that was even lower then the levels he warned about last week in a research note that cautioned about the impact of China. The analyst states that his caution is driven by concerns around 8-bit MCU and isolation in the China market, adding that high-valuation stocks like Silicon Labs with historical multiples in 25- to 28-times range are "vulnerable to share price declines in this uncertain economic climate". Gill expects the company's FY19 revenue to decline by 3% and believes that the stock can trade in the $65-$72 range when applying his new earnings multiple of 19- to 20-times on his FY20 EPS estimate.

Barclays analyst Tom O'Malley lowered the firm's price target on Silicon Labs to $120 from $140 and keeps an Equal Weight rating on the shares. The company's revenue is rebounding off of December bottom and a recovery is underway, but operating expenditures ticked up and the margin miss make return to profitability a bit of a longer road, the analyst tells investors in a research note.

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.