Needham raised the target and reiterated the buy rating on Powerwave Technologies (PWAV).
Analyst Rich Valera says the company delivered strong results in the first quarter it merged with LGP Allgon, meeting or exceeding his top-line and bottom-line estimates. He says the company gave a confident second-half outlook. He's encouraged by the gross margin performance and the outlook, which should enable profitability by the third quarter, ramping toward high single-digit operating margins in late 2005.
He expects some skepticism concerning his upbeat second-half guidance, but says the company has already incorporated weakness from AT&T Wireless/Cingular into its numbers. He upped the $8 target to $11. He trimmed the 2 cents 2004 EPS estimate to 1 cent, and upped the 27 cents 2005 EPS estimate to 33 cents.