Deutsche Bank Keeps 'Hold' on Xilinx

Analyst Ben Lynch says the company's small increase in fourth-quarter sequential revenue growth is slightly disappointing

Xilinx (XLNX ) says it expects fourth-quarter revenue to be up 9% to 10% sequentially. Deutsche Bank kept its hold rating on the stock.

Analyst Ben Lynch says the company raised its fourth-quarter sequential revenue guidance to 9% to 10% growth from its previous 7% to 10% target. He says he expected more positive guidance, somewhere in low double-digit range quarter-over-quarter, and views small top-line increase as slightly disappointing. He notes recent channel checks in Taiwan showed FPGA loading at UMC (the company's main foundry) has been strong, implying upside to forecasts; may suggest solid first quarter guidance.

Despite near-term improving fundamentals, Lynch says upside to the stock is limited. He sees EPS of 77 cents in fiscal year 2004 (ending March) and $1.11 in fiscal year 2005. He kept a $38 price target on the stock.

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