Morgan Keegan keeps its outperform rating on Intersil (ISIL).
Analyst Harsh Kumar says he's very positive on Intersil's acquisition of Xicor, and he sees little overlap in terms of products. He thinks cross-selling opportunities creates upside potential. He sees a neutral to slightly positive impact in 2004, and about 10 cents accretion to the 2005 earnings per share, so he's adjusting his model.
Kumar says the market had valued Xicor at about 8 times revenue, and the purchase price of 9.5 times to 10 times could be weighing on Intersil's stock today. He notes post-acquisition, Intersil will have $700 million in cash. He bbelieves the stock is very attractive at current levels, and rates the shares as outperform.