Programmable chip maker Xilinx (XLNX) is hosting an analyst day meeting in Boston starting in just a little while, at 3 pm, Eastern time, and you can catch the webcast of it online in real time.

Xilinx stock is up 18 cents, or 0.4%, at $44.93.

A couple of Street observers weighed in, in advance of the talk, with their perspectives on what to look for. A big focus, of course, will be competitive positioning, as Xilinx goes up against the combination of former competitor Altera and its now parent, Intel (INTC).

Credit Suisse’s John Pitzer, who has a Neutral rating on the stock, and a $43 price target, writes that “we would prefer if management would focus on total returns rather than growth, as historical growth projections have tended to be overly optimistic.”

He notes the event is already somewhat anti-climactic, as the company announced last month its outlook for the year, one that was none-too-pleasing:

Investors were disappointed by FY17 guidance as (1) 4-8% y/y Rev growth does not look conservative – implies ~400 bps of ABOVE seasonal growth every quarter post F1Q (2) OpEx growing faster than Rev is never optically appealing – OpM peaked in FY11 at 34% is guided to be 29% in FY17.

JP Morgan’s Joseph Moore has an Equal Weight rating on the stock, and a $43 price target, and like Pitzer, he was “a bit discouraged by the opex increases for FY17 that emerged in the most recent quarter, as even with accelerating growth there is limited leverage.”

“Long term, we still like the opportunity here but at current levels feel the stock offers a balanced risk reward and would look for a better entry point to get more constructive on the name.”

Digging into the forecast for this year, he writes,

Xilinx unveiled 4-8% revenue growth target for FY17 at its April’16 quarter earnings call. The company expects growth to be led by a rebound in communications and data center and growth in broadcast, consumer and automotive, while Industrial and A&D should be up as well. Xilinx’s overall revenues in FY16 were basically at the same level as FY12 as growth in areas such as Automotive and Industrial have been offset by the volatile Communications end market (Exhibit 1). We would like to get more color on the key drivers for the Communications & Data Center segment in FY17 given sales in the segment have declined at 1.5% CAGR over the last 4 years (Exhibit 2)driven by weak trends in the wireless business over the last couple of years. In addition, we expect to get an update on the near term trends in the base station business where the company has seen growth return over the last few quarters but the overall market environment remains pretty choppy.

 

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