Xilinx Inc XLNX

Xilinx reported fiscal fourth-quarter results ahead of our expectations, led by record automotive revenue and strong wireless sales related to 5G. Due to the pending merger between Xilinx and AMD, the firm did not host a conference call to discuss the results or provide guidance. We are maintaining our probability-weighted fair value for Xilinx of $157 per share. We assign a 75% probability to the value that Xilinx shareholders will receive from AMD of $179 per share (based on our $104 combined fair value times the exchange ratio of 1.7234 shares). The remaining 25% probability stems from our unchanged $90 fair value for standalone narrow-moat Xilinx. We think prospective investors should find current levels attractive.