Chardan Capital Markets has reiterated its "Buy" recommendation for TowerJazz (Nasdaq: TSEM; TASE: TSEM) with a target price of $3.10, a 126% premium on yesterday's close of $1.37 on Nasdaq. The investment house cites the specialty foundry's early $20 million bank debt repayment, which reduces the debt overhang, and that it reiterated its 2010 revenue guidance.
Chardan also noted that TowerJazz's lenders, Bank Hapoalim (TASE: POLI) and Bank Leumi (TASE: LUMI), agreed to TowerJazz raising $100 million in new bonds with a duration of 5-7 years.
Chardan says that TowerJazz's strengthening of its balance sheet was a positive move. "We believe the debt has been an overhang on the stock and as such lowering and restructuring the debt should alleviate investor concerns."
Chardan concludes by saying that TowerJazz is well positioned for the rest of the year. The recent drop in its share during the broader market sell off "offers investors an opportunity to put new money to work at these levels".
TowerJazz's share price rose 4.6% yesterday on Nasdaq to $1.37, giving a market cap of $272 million. The share price rose 5.3% by mid-afternoon today on the TASE to NIS 5.51.
Published by Globes [online], Israel business news - www.globes-online.com - on June 3, 2010
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