In a research note, Caso wrote that the upgrade is based on his view that “inventory issues have largely been resolved.” He adds that “checks indicate a better tone from the channel with respect to order patterns.”
Caso says he does not expect much market leverage from Intersil, but that “growth in the company’s standard product lines will yield growth opportunities for 2007.” He contends the stock is “very attractively valued,” noting that excluding the company’s $5 a share in cash, the stock trades for 17x expected pro forma 2007 EPS and 14x 2008 estimates.
Caso increased his price target on the stock today to $32 from $24.
This morning, Intersil shares are up 42 cents at $27.24.
ISIL 1-yr chart