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Semiconductor stocks were in the spotlight at B. Riley, Wednesday, as analysts Craig Ellis and Michael Mani took their axes to the ratings and price targets on more than a dozen chip and chip-equipment makers.
In a research report, Ellis and Mani said the moves reflect growing concerns about factors such as a decrease in product demand and rising costs that are expected to continue through this year and into 2023. Additionally, the pair said broader economic issues are having an impact on the chip sector as well.
"Further surging energy and food prices, triggering record-low June U.S. consumer sentiment, intensifies [the risk of] electronic product demand destruction," Ellis and Mani said. The analysts added that such greater economic issues present a challenge to "what we believe is strong strategic and operating execution" among many leading chip companies.
With regards to the companies themselves, Ellis and Mani made the following revisions:
They cut their ratings on Marvell Technology (NASDAQ:MRVL), Semtech (NASDAQ:SMTC), Lam Research (NASDAQ:LRCX), Camtek (CAMT), Ichor Holdings (ICHR), Alpha and Omega Semiconductor (AOSL), Indie Semiconductor (INDI) and Transphorm (TGAN) to neutral from buy. Ellis and Main also lowered their price target on Marvell (MRVL) to $63 a share from $75, cut Semtech's (SMTC) target price to $65 a share form $87, took down Lam Research's outlook (LRCX) to $525 a share from $635, lowered Camtek's (CAMT) price target to $29 a share from $35, dropped Ichor Holdings (ICHR) to a target price of $30 a share from $37, lowered Alpha and Omega (AOSL) to $42 a share from $62, cut their price target on Indie (INDI) to $8 a share from $9, and trimmed Transphorm's (TGAN) price target to $6.50 a share from $9.
Additionally, Ellis and Mani cut their price target on Microchip Technology (MCHP) to $78 a share from $85, lowered FormFactor's (NASDAQ:FORM) outlook to $48 a share from $55, cut SkyWorks Solutions (SWKS) to $110 a share from $125, reduced the price target on Axcelis Technologies (ACLS) to $80 a share from $98, cut Kulicke and Soffa Industries' (KLIC) target price to $50 a share from $59, lowered Identiv's (INDI) price target to $8 a share from $9 and took done Sequans Communications (SQNS) price target to $5 a share from $6.
Among the companies that Ellis and Mani assessed, Indie Semiconductor (INDI) Chief Executive Donald McClymont said in an interview on CNBC, Wednesday, that his company is on track to become profitable by next year.