Following Analyst Day at Lattice Semiconductor Corp (NASDAQ: LSCC), Jefferies upgraded the stock, as the company has emerged from a transaction process and provided a comprehensive outlook, removing overhangs on the stock.

Jefferies continues to view the company as a potential takeover target, given its "relatively high operating expenditure and low EV/sales." As such, the firm upgraded shares from Hold to Buy and lifted its price target from $6.50 to $7.

At time of writing, Lattice Semiconductor shares were uo 5 percent to $5.76.

Analyst Mark Lipacis sees the company benefiting from the fourth Tectonic Shift in Computing, thanks to its focus on low-power programmable architecture. The analyst said this value will be further enhanced and differentiated by its planned adoption of 28nm, FD-SOI.

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The fourth Tectonic Shift, according to the analyst, is a shift to a parallel processing/IoT model, driven by lower memory costs, free data storage, improvements in parallel processing hardware and software, and improvements in artificial intelligence, or AI, technologies like neutral networking that makes it easy for monetizing all data stored.

"Programmable devices like LSCC's lend themselves well to parallel workloads that require real-time low-latency processing," Jefferies said.

The firm said Lattice's architecture is best suited to address the need for order of magnitude lower power, cost and footprint.

Meanwhile, Jefferies think the company's decision to pay down debt will be accretive to its earnings per share, while also leading to multiple expansion. The firm also said progress toward its growth and model targets will provide momentum.