(LLTC) Linear Technology – Bear of the Day

Linear Technology Corp. (LLTC) is a leading OEM of analog and mixed signal semiconductors. The Japan crisis, continued lack of consumer confidence and credit-related crisis in the Americas and Europe led to a disappointing guidance.

Therefore, we advise investors to avoid the shares, since we believe there is uncertainty in near-term demand. This, along with the company’s debt burden, will continue to weigh on sentiments. We therefore reiterate our Underperform rating on LLTC shares.

The forward P/E of 13.2X based on our 2011 earnings estimate represents a 24.5% premium to the peer group, which opposes historical trends, indicating downside. The expected earnings growth rate of 9.0% is also significantly lower than the peer group growth rate of 14.3%.

LINEAR TEC CORP (LLTC): Free Stock Analysis Report

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