On Wednesday, KeyBanc analysts showed increased confidence in Lattice (OTC:LTTC) Semiconductor (NASDAQ:LSCC), as they raised the company's price target from $54 to $70. The analysts sustained an Overweight rating on the stock, signaling a positive outlook. According to InvestingPro data, the stock currently trades at a P/E ratio of 57.56x, reflecting premium valuation metrics. The stock's current price of $59.12 sits within the broader analyst target range of $50-$85.
The adjustment in price target comes as KeyBanc introduced its 2026 estimates and updated its valuation approach. The new price target is predicated on a 43 times multiple of the firm's 2026 estimated earnings per share (EPS) of $1.61. This is a significant increase from the three-year historical medium multiple of 30 times. At present, Lattice Semiconductor's shares are trading at 37 times KeyBanc's 2026 EPS estimate of $1.61. While InvestingPro analysis indicates the stock is currently overvalued, the company maintains strong financial health with a solid current ratio of 3.98x and minimal debt levels. Get access to 15+ additional ProTips and comprehensive valuation metrics with InvestingPro's detailed research report.
The KeyBanc analysts' decision to raise the price target is based on a forward-looking valuation method, taking into account the company's future earnings potential. They have acknowledged the stock's current valuation in comparison to their earnings forecast for 2026, which underpins their positive rating.
The analysts also outlined potential investment risks that could prevent Lattice Semiconductor's stock from reaching the new price target. These risks include intensifying competition in low-power Field-Programmable Gate Arrays (FPGAs), which could lead to market share losses to Chinese competitors. Another concern is the possibility of slower-than-expected ramp-ups in design wins across key sectors such as 5G, cloud computing, automotive, and industrial markets. Additionally, they noted the risk associated with executing the company's strategy effectively, given its limited scale.
KeyBanc's revised price target and maintained Overweight rating reflect a positive stance on Lattice Semiconductor's prospects, considering both the anticipated earnings growth and the potential challenges the company may face. The analysts' commentary offers insights into the factors driving the valuation and the risks that investors might consider. Recent InvestingPro data shows concerning trends, with 11 analysts revising earnings downward and revenue declining by 24.23% in the last twelve months. Discover the complete financial picture with InvestingPro's comprehensive research report, featuring detailed analysis of 1,400+ top stocks.
In other recent news, Lattice Semiconductor has been the center of several significant developments. The semiconductor giant recently announced the adoption of a new equity incentive plan, reserving 2 million shares of common stock for equity awards. The plan is designed to attract top talent, potentially enhancing Lattice's innovation and growth within the competitive semiconductor market.
In financial news, Lattice reported third-quarter earnings per share (EPS) of $0.24 and revenue of $127.1 million. In response to these results, the company has expanded its stock repurchase program by an additional $100 million, extending through December 2025.
Analysts from various firms including Needham, Baird, and KeyBanc Capital Markets have adjusted their price targets for Lattice Semiconductor. Needham raised its price target to $70, citing the company's latest hardware innovations showcased at the Developers Conference, while Baird increased its target to $68, highlighting potential growth in the AI and security sectors. KeyBanc, however, reduced its target to $54 due to ongoing challenges in the industrial sector.
These recent developments reflect Lattice Semiconductor's strategic focus on stabilizing operations, executing its current product roadmap, and positioning itself for future growth in the dynamic semiconductor market.
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