Fairchild Semiconductor (NYSE:FCS) Margins Should Expand Going Forward

Citing comments Fairchild Semiconductor (NYSE:FCS) management recently made, UBS (NYSE:UBS) said margins in the near and mid term should expand.

UBS said, "Based on recent comments by management, we believe that with improving product mix and operating model, FCS should continue to expand its margins in near to mid term. We raise our longer term operating margin assumption for FCS to 15% from 12% (vs. long term target of 20%) and we believe that FCS should be valued at a PE multiple closer to that of its peer group at - 16x...Our 2011 and 2012 Rev/EPS estimates of $1,675m/$1.62 and $1,763m/$1.88 are significantly above cons of $1,608m/$1.36 and $1,706m/$1.62."

UBS reiterates a "Buy" rating on Fairchild Semiconductor, which closed Tuesday at $15.92, gaining $0.25, or 1.60 percent. UBS raised their price target on them from $15 to $21.