(Adds details, share reaction, analysts' comments)
By Steven Scheer
JERUSALEM, Nov 30 (Reuters) - Israeli chipmaker TowerJazz has told analysts it has set a long-term annual revenue target of $3.5 billion as it sees growing demand for chips used in cars and sensors, the company said on Thursday.
The company is also aiming for net profits of $520 million a year, EBITDA of $1.05 billion and free cash flow of $476 million.
In 2017 the company expects revenue to total $1.4 billion, net profit $221 million, EBITDA $435 million and free cash flow $177 million.
Tower made the projections at an analysts' conference in New York on Wednesday. It confirmed the new revenue forecast in an emailed statement.
The company specialises in analog chips used in cars, medical sensors and power management, sectors it believes will continue to rapidly drive its growth, especially as the need for chips in radar systems for self-driving cars increases.
Its Tel Aviv shares were up 4.6 percent in afternoon trading and were 2.4 percent higher at $35.30 in pre-market trade on Nasdaq.
Drexel Hamilton analyst Cody Acree raised his target share price for Tower to $46 from $38, saying "discussions with management indicated that the firm was pursuing potential acquisition opportunities that if finalised, could give them visibility to eventually reaching this aggressive revenue goal".
In a note to clients he said such a scenario would entail a major acquisition of an existing foundry business.
Rather than building or buying factories at huge cost, TowerJazz's strategy is to look for plants with idle capacity. It acquires the capacity while striking supply deals and offering other incentives such as a share of profits and technical know-how.
"We believe there are at least a couple of different acquisition targets that Tower is evaluating," Acree said.
Tower believes it could boost revenues by $1.5 billion through acquisitions and $350-$550 million by expanding capacity at its plants in Israel, Japan and Texas.
Needham raised its share price target for Tower to $50 from $45 and maintained a "strong buy" investment rating. (Reporting by Steven Scheer Editing by Greg Mahlich)