Analysts See Good Things for Orbotech and Comverse
By TheMarker.com Staff
12/21/00 12:38 PM ET
URL: thestreet.com
Against a backdrop of plunging tech stocks on Wall Street, Israel-basedComverse Technology (CMVT:Nasdaq ADR) and Orbotech (ORBK:Nasdaq ADR) this week won praise from U.S. investment analysts.
Comverse has signed three new deals in the last seven days, prompting Salomon Smith Barney and US Bancorp Piper Jaffray to publish highly favorable reports based on the fast-growing popularity of three new products, a departure from the company's core voice mail lines. They new offerings involve data communications applications for cellular networks, unified messaging for various communications platforms and pre-paid wireless solutions.
While Piper Jaffray reiterated its earnings-per-share, or EPS, forecast, Solly updated its forecast for Comverse for 2000 and 2001. Neither changed price targets of $130 and $120, respectively, or ratings of moderate-risk outperform and strong buy.
Solly analysts Robin Nazarzadeh and Victor Halpert forecast that EPS will come to $1.46 this year, vs. the previous forecast of $1.41. EPS at the end of 2001 are predicted to total $1.77, seven cents above the previous forecast.
Piper Jaffray analysts Edward R. Jackson and David M. Hawks reiterate their EPS forecast: $1.45 for 2000 and $1.77 in 2001.
The three deals Comverse sealed are a unified messaging agreement with Pacific Century CyberWorks (PCW:NYSE ADR), formerly Hong Kong Telecom, and with Brazilian mobile operators BCP Telecomunicacoes and BSE Telecomunicacoes for provide prepaid cellular services solutions.
The new noncore products will probably account for more than 20% of the company's revenue this quarter, against 17% in the previous quarter.
Salomon expects that next year the company's revenues from the new products will increase 20% a quarter to $53 million in the third quarter of 2001.
Orbotech, meanwhile, ...
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