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Technology Stocks : The New QUALCOMM - Coming Into Buy Range -- Ignore unavailable to you. Want to Upgrade?

To: JeffreyHF who wrote (5085)	4/28/2009 9:20:47 AM
From: JGoren	1 Recommendation Read Replies (1) \| Respond to of 9130

Analysts raise their Price Targets Macquarie Research, 4-28: Reiterates Outperform rating and raises price target to US$50 from US$45, based on 21x FY10 pro forma EPS. Deutsche Bank, 4-27: REiterate buy, raises target to $50 from $42. Settlement motivation factors: First, cost of work-around products was becoming increasingly expensive. This trend worsens significantly as they shrink process geometries from 65nm to 45nm and beyond. Second, without a settlement, legal costs would have accelerated this year as the various cases progressed. The settlement does open the door to Broadcom to compete in the 3G baseband chipset market, but DB sees Broadcom’s prospects in this market as challenged. Bank of America-Merrill Lynch, 4-27: Raises FY09 pro-forma EPS by 12c to $2.01 which translates to CY09 EPS improvement of +10c to $2.03. However we tweak down FY10 estimates to reflect impact of lower ASPs and pressure on WCDMA handset growth. For FY10 we lower EPS by 19c to $2.34 which still puts up well above prior consensus of $2.14. New forecasts imply CY2010 EPS down -21c to $2.45 (+21% YoY). Near term basis, upside to the stock is limited. The stock traded up strongly on multiple items: recovery in demand for semiconductors, strong demand for CDMA handsets in China and a settlement of the dispute with Broadcom. However, with the stock trading at 20x 2010E EPS and 19x EPS (excash), ML believes it may rebase at the current levels until the estimates catch up with the recent share gains. Revenue guidance implies chipset pricing pressures. Believes profit forecast too low and that margins will be greater than mgt implied and more in line with what they are now but about a percent below. Nokia and Broadcom agreements eliminated pass through rights. This may reduce the attractiveness of Qcom chips. ML raises price objective from $42 to $50, based on 20x PE applied to CY2010 pro-forma EPS estimate of $2.45. The choice of PE implies about 1x PEG ratio. Credit Suisse, 4-28: Raises price target from 45 to 50. Oppenheimer, 4-28: Maintains Outperform rating and raises price target to $47 from $38, based on a 22.8x P/E multiple of our FY10E EPS of $2.06. Wm Blair, 4-28: increasing 3Q and full year 2009 estimates to reflect the improved outlook for the second half of this year. For the 3q revenues of $2.51 billion (up from $2.35 billion) and EPS of $0.48 (up from $0.41). For full year 2009 revenue of $10 billion and adjusted EPS of $1.98 (up from $9.6 billion and $1.75). Diluted EPS estimate for 2009 is now $1.68. Increasing fiscal 2010 revenue and EPS estimates to $11 billion (up slightly) and $2.25 (up from 2.04), respectively. ThinkEquity, 4-28: Reiterate Buy ratingtarget is increasing from $50 to $55 based on an approximate 37.5x multiple to our CY09 EPS of $1.47, and approximately 21.0x our CY10 EPS of $2.62. Believes that this multiple is justified given the strong cash flows the company generates. On an EV/FCF basis the $55 target is ~15x our 2010 FCF estimate of ~$4.8B.