10/3/07 Wedbush raised their tgt on Silicon Labs to $47 from $43, saying revs and expanding operating margins should drive the stock higher. Firm said their checks indicate microcontrollers and Broadcast products are selling well with stable leadtimes, flat inventories, and normal price declines. Firm also said the broadcast business can be the key lever for more upside to the stock, and the microcontroller business remains strong.
I don't think the Broadcast business is good enough to warrant $47/share. Take out the sale of Wireless and the $12/share in cash and the P/E is still pretty high given SLAB's growth performance. The buyback appears to be putting the squeeze on available float. This squeeze will correct itself when the institutional guys decide to monetize their gain.