FBR Capital Upgrades National Semiconductor Corp. (NSM) to Outperform; Underperforming Names with Value
December 3, 2010 7:48 AM EST
FBR Capital upgraded National Semiconductor Corp. (NYSE: NSM) from Market Perform to Outperform. PT increased from $17.50 to $20.
FBR analyst says, "Shares of NSM have vastly underperformed peers over the past 12 and 24 months, and we think investors should buy low. Further, expectations on NSM remain muted, as evidenced by the stock's still attractive P/E of 9x (2011 GAAP) on EPS estimates that could improve if the firm can stop losing market share to TI (NYSE: TXN) and Maxim (Nasdaq: MXIM), the firm has a new CEO in Don Macleod, and National has identified a plan to regain some lost handset analog market share. Further, the firm pays a solid 2.5% dividend yield, and is heavily exposed to very favorable chip trends in analog power management, industrial, automotive, LED lighting, solar, medical imaging, and others.
We do think risk/reward is favorable on shares with downside risk to $11 in a choppy market, and upside opportunity over time towards $25."
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