Littelfuse LFUS announced today that it will buy a 200mm wafer fab in Dortmund, Germany from Elmos Semiconductor SE. The purchase is expected to close early in fiscal 2025. The total purchase price is about EUR 93 million, of which EUR 37 million will be paid after regulatory approvals and EUR 56 million will be paid at closing.
The wafer fab will help Littelfuse grow its business in industrial markets such as renewables, energy storage, automation, motor drives, power supplies and e-Mobility off-board charging infrastructure. It will also provide a skilled technology team with 200mm manufacturing and development expertise.
The wafer fab acquisition is an integral part of Littelfuse’s long-term growth strategy for power semiconductors. It will share the wafer fab capacity with Elmos Semiconductor SE for a multi-year period until 2029.
Strong Product Portfolio Aids Littelfuse’s Prospects
The electronics components industry in the United States is expected to perform well in 2023, driven by strong demand from key end-use industrial verticals, moderating global electronics supply chain challenges and improved availability and falling prices for components.
Littelfuse, Inc. Price and Consensus
Littelfuse, Inc. price-consensus-chart | Littelfuse, Inc. Quote
Global economic expansion, rapid urbanization and continuous technological innovations, driven by increased R&D spending, have been major headwinds.
Littelfuse, which operates in a similar industry, has been benefiting from an expanding portfolio of technologies and growing internal capabilities. This enables the company to meet the growing needs of their customers in power conversion applications.
The Dortmund fab complements its current footprint, adding a highly-experienced team and an efficient high-quality wafer processing operation.
Littelfuse’s shares have outperformed the Zacks Electronics – Miscellaneous Components industry in the year-to-date period. While LFUS’ shares have gained 29.8%, the industry has increased 10.4%.
However, it has underperformed the Computer and Technology sector which increased 35.7% year to date. The downtick was primarily due to stiff competition, geopolitical uncertainty, elevated logistics and labor costs and unfavourable forex.
The company expects its reduced inventory levels and lead times to drive the top line in the rest of 2023. It also continues to expect long-term double-digit content growth based on significant design wins in electrification and electronification.
This Zacks Rank #2 (Buy) company expects second-quarter 2023 revenues between $607 million and $633 million, indicating a year-over-year flat growth at midpoint.
The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $618.83 million, indicating growth of 0.06% from the year-ago quarter’s reported figure.
The consensus mark for earnings has remained unchanged at $3.32 per share in the past 30 days.
Other Stocks to Consider
Some other top-ranked stocks worth considering in the same sector are NVIDIA NVDA, Nova Ltd. NVMI and IPG Photonics IPGP, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA shares have gained 179.3% year to date. The long-term earnings growth rate for NVDA is projected at 23.02%.
Nova shares have gained 40% year to date. NVMI’s long-term earnings growth rate is projected at 3.62%.
IPG Photonics shares have gained 41.9% year to date. IPGP’s long-term earnings growth rate is projected at 8.71%.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Littelfuse, Inc. (LFUS) : Free Stock Analysis Report
Nova Ltd. (NVMI) : Free Stock Analysis Report
IPG Photonics Corporation (IPGP) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
