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Pro Analysis

Buy iPhone supplier Synaptics after stock sinks, JPMorgan says

touch screen technologies
Jose Luis Pelaez | Getty Images

JPMorgan on Tuesday added Synaptics to its "focus list" with an overweight rating, citing attractive valuations after a 22 percent drop in the stock last week on missed earnings.

Last Thursday, the maker of touch screens used in mobile devices and other products reported margins that fell short of analysts' expectations, causing the shares to plunge.

"The margin swoon is on higher-than-expected revenues, so the gross profit and consensus EPS [earnings per share] outlook remain largely unchanged, and the company outlook calls for margins to improve in early CY17 [calendar year 2017]," wrote equity analyst Paul Coster in a research note.