3Q16 Earnings Preview: Upside to Estimates but not Sustainable in our View – Stick With Apple Food Chain and M&A
We expect upside to results and seasonal guidance during earnings season from most semiconductor companies due to higher order rates primarily from the PC and handset end markets due mostly to inventory re-stocking. As a result, we remain cautious on the semi sector as we don’t see evidence the strong order rates are sustainable. We would stick with the Apple food chain and M&A stories as we believe earnings upside are sustainable in those instances. Our favorite stocks remain Buy-rated Microchip, Broadcom, ON Semi, and Texas Instruments.
Stick with Apple food chain, M&A. : Microchip, Broadcom, and ON Semi.