MACOM Technology Solutions has recently pulled back, giving investors a compelling buying opportunity, according to Raymond James. The investment bank upgraded the semiconductor stock to “outperform” from “market perform,” and put a $300 price target on the stock, suggesting 23% upside from Monday’s close. “Lately, shares have been caught up in the broad AI rotations in the market, which we feel is only partially warranted — our favorable view extends beyond the Datacenter opportunities (though demand there has accelerated rapidly), and focuses more on the overall business, with exposure to high-value space, defense and communications applications,” Raymond James analyst Melissa Fairbanks wrote Tuesday in a report. Shares of MACOM briefly plunged about 35% between October 6 and October 22, according to FactSet data. But now the stock could bounce back, especially given its exposure to multiple end markets that offer secular growth catalysts, according to Raymond James. MACOM presents a “lean operating structure [with] significant leverage driving outsized earnings and cash flow returns,” which should bolster its balance sheet, Fairbanks said. That, in turn, should drive more value to shares, she said. “We see significant room for profitable upside over the next twelve months,” the analyst wrote. The Raymond James call matches the consensus on Wall Street, where 16 of 19 analysts rate MACOM a buy or strong buy, with only three holds, LSEG data shows.
