Linear Technology (NASDAQ:LLTC) Too Pricey in Short Term

Linear Technology (NASDAQ:LLTC) has done a good job in sustaining their margins, but there are few, if any, catalysts in the short term to make them attractive to FBR.

FBR says, "Some bulls may point to long-term growth opportunities in industrial, automotive, and comm/networking, and industry-high margins. Bears may argue that the firm is already well run with few operational improvement initiatives, that margins are near a peak, and that the firm walks away from too much business (Apple (Nasdaq:AAPL), among others) so the firm may keep its margin structure intact. We find ourselves somewhere in the middle, apathetic on the stock given that Linear is not very inexpensive nor very growthy, and given our view that other chip stocks offer more upside returns (ON Semi (Nasdaq:ONNN), Maxim (Nasdaq:MXIM), Fairchild Semi (NYSE:FCS), Microsemi (Nasdaq:MSCC), Marvell (Nasdaq:MRVL)). We agree that further gross margin expansion opportunities are limited, with some Apple unwind a headwind in calendars 1Q11 and 2Q11. We thus prefer less-expensive chip stocks, product-cycle stocks, or fab-consolidation stocks. (FY11 EPS estimate lowered from $2.50 to $2.45)"

FBR Capital reiterates an "Underperform" rating on Linear Technology (LLTC), which was trading at $34.66, down $1.47, or 4.07 percent, as of 11:14 AM EST. FBR dropped their price target on Linear from $35 to $34.