Analysts at Morgan Stanley (NYSE:MS) and Mizuho are strengthening their bullish stances on a semiconductor chip stock, with one now saying it's their "favorite long position in the entire tech sector."

An analyst at Mizuho said Silicon Motion (SIMO) is his favorite name in tech for now, saying it's poised for an uptick into the second half of this year and "looks perfect for real alpha generation."

The firm states that SIMO has generated positive free cash flow over the last four years and that its capex has been modest.

Mizuho analysts commented:

"SIMO's EPS strength may not return to the $6 range, post-COVID-19 peak years, until next year, but that's a possibility in 2-3 years. What the bulls are telling me is SIMO's 18x on $5 EPS strength next year." or that it is worth $90.

They have $9 in cash and could earn half of that if an arbitration court in Singapore rules against MXL and in their favor for abandoning the planned merger with SIMO.”

Meanwhile, Morgan Stanley said the company's shares are "finally starting to enjoy an uptrend." In a note released today, they upgraded the stock from "Equal Weight" to "Upweight" and raised their price target to $88 per share from $59.

“We are excited by the business positives, including greater savings and margin expansion, as well as new business advantage in the age of AI.”

While Morgan Stanley found SIMO's valuation attractive, it raised its estimates to reflect the company's earnings strength.

#CryptoWatchMay2024 #BNB #Binance #geleceğihatırla #borsa $BTC $ETH $BNB