UPDATE: D.A. Davidson Downgrades RF Micro Devices

Courtesy of Benzinga.

D.A. Davidson downgraded RF Micro Devices, Inc. (NASDAQ: RFMD) from Buy to Neutral and maintained a $16 price target.

Analyst Thomas Diffely explained that he has moved to the “sidelines after a 200 percent move.”

“While our bullish model and positive outlook on the pending merger with TriQuint Semiconductor remains intact, we believe the robust stock outperformance largely reflects the more positive margin and synergy targets that management outlined at the recent Qorvo analyst meeting,” according to Diffely.

The analyst note added that “with shares trading at a reasonable 12x 2016 EPS and only modest upside to our 12-18 month price target, we believe the risk-reward profile is now balanced.”

Diffely concluded that the basis for the price target is the "fact that RFMD shareholders will receive one share of Qorvo for every RFMD share owned, and the initial Qorvo share count will be 600 million (prior to a planned 4:1 reverse split), the $5.00 of earnings power projected from the new target model equates to $1.25 in earnings power for current RFMD shareholders in 2016.”

RF Micro Devices recently traded at $14.80, down 4.5 percent.

Posted-In: D.A. Davidson Thomas DiffelyAnalyst Color Downgrades Price Target Analyst Ratings