- Believing chip industry sales are near a cyclical peak and the company's high industrial chip exposure is a problem given macro pressures, UBS' Stephen Chin has downgraded Linear (LLTC -1.6%) to Sell. His target, set before Linear rallied to the high $40s, remains at $42.
- Chin still considers the analog/mixed-signal chipmaker "one of the best run companies in semis with industry leading gross and operating margins." But he deems upside to be limited at an EV/free cash flow valuation of 18.1x (slightly above an industry average of 17.4x).
- He's more partial to Linear's rivals: Texas Instruments (TXN -0.3%) is deemed "more diversified and better hedged in a cyclical downturn," and Analog Devices (ADI -1.2%), which just posted an FQ1 beat and solid FQ2 guidance, is declared to have "a better growth outlook" thanks to auto chip and sensor investments.